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Indemnity Policy Instead of Planning Permission - is this normal?
evo21
Posts: 21 Forumite
Is this normal...?
We are at the point of exchange to buy a flat that does not have correct planning permission (permission was granted for 26 flats, developers only built 24).
We are being told we can exchange with an indemnity policy and our bank is happy to lend on this basis.
Everything seems OK, but I'm totally out of my depth and just trusting the process. Is this common?
We have asked that retrospective planning permission be put in but the developers have made it clear that they have no intention of doing this.
We are at the point of exchange to buy a flat that does not have correct planning permission (permission was granted for 26 flats, developers only built 24).
We are being told we can exchange with an indemnity policy and our bank is happy to lend on this basis.
Everything seems OK, but I'm totally out of my depth and just trusting the process. Is this common?
We have asked that retrospective planning permission be put in but the developers have made it clear that they have no intention of doing this.
0
Comments
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It's fairly normal. Do you know why they didn't build 26 flats?0
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It happens all the time - its much cheaper, easier and quicker to get indemnity insurance than to faff around with something that almost certainly doesnt matter and no-one, particularly the council, would want to make the effort to regularise.0
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how long ago was the buildibg completed? The Local authority have 4 years (Town & Country Planning Act) to enforce the planningrules. After that they can't.
Having said that, it is rediculously common for mortgage lenders to insist on indemnity insurance in these cases, so if you want the mortgage you have to go along with it.
You could always find the cash yourself and then do as you please......0 -
How long ago were the flats built? Enforcement is only possible within a certain period of completion. Indemnity only covers the cost of defending against enforcement.
Is the deviation from planning permission external, or just internal?
Were the missing flats required to conform to population density requirements, or to meet additional housing requirements, or affordable housing requirements, or some other policy-driven requirement made in order to grant permission?
In short, have the developers actively extracted the michael, or merely made a relatively minor change?0
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