Indemnity Insurance re - Access Rights

CFMackay

Hi All!

After some sage advice on what has been a rather hellish house buying/selling process!

We are/were in the process of selling our leasehold apartment and buying a repossession property (which has now fallen through due to the buyers solicitors taking from the first week of February and still ongoing). Essentially the issue is our buyers (who are a lovely couple) are buying our apartment with a 'Help to Buy' incentive and an additional MOD 'Help To Buy' alongside their general mortgage. This has meant they've needed a lot more information from us than usual and a lot more info than we needed to buy just 2 years ago, which has come at a cost to us throughout so far for additional documentation etc. which we've been fine to incur.

Our solicitors and Freehold owners have agreed it's become quite farcical and now we have hit an impasse whereby the access to our property and neighbouring properties is via an unadopted road. The access rights are granted to the Freeholder of our building and not the individual properties within. Whilst this has been no problem for ourselves or neighbours buying within the building they've come back to us months on to say that is not acceptable and therefore we will have to pay a few hundred pounds in indemnity insurance to counter it, whilst not saying whether this would work as a guaranteed resolve (meaning it could yet again all be ongoing). I have pushed the cost back to the buyer as in my opinion it wouldn't be an issue usually as it never has been before and this is in fact caused by their unusual buying position. Is this the right approach to take do you think?

Thanks in advance and sorry for the rant!

saajan_12

Its simply a negotiation. You could say the insurance is a requirement of their stringent HTB+mortgage checks compared to other buyers. They could say the insurance is a requirement of the unusual access rights situation compared to other properties.

Both parties have something to lose if the deal doesn't go through (buyers have spent legal/survey/mortgage costs, sellers have invested time in responding to queries so risk the chain collapsing). If the insurance is a dealbreaker for the buyers (or buyer's source of funds) then it's a negotiation who blinks first. Either could pay or you could split.

G_M

I doubt the insurance will help your buyers. If access were cut off for whatever reason, the insurance would not magically make access legal. Your buyers would be left with no access.

What the insurance would do is pay consequential costs eg drop in value of the flat if they (or one of the multiple mortgage lenders) were forced to sell.

Having said that, it sounds to me like

a) this is a nightmare sale, and
b) you're in no hurry as your own purchase has collapsed

so tell them to proceed or you will re-advertise. If they pay for the insurance themselves, and satisfy their lenders, so well and good. If not, find less demanding buyers.

davidmcn

G_M wrote: »

What the insurance would do is pay consequential costs eg drop in value of the flat if they (or one of the multiple mortgage lenders) were forced to sell.

Or more likely, it would pay for the insurers to do a deal with whoever is trying to hold the leaseholders to ransom. Or to argue with them in court.

G_M

davidmcn wrote: »

Or more likely, it would pay for the insurers to do a deal with whoever is trying to hold the leaseholders to ransom. Or to argue with them in court.

True.

Point is these indemnity policies (whether for access difficulties, missing Building Regs, whatever) don't make issues vanish, as buyers are often led to believe. They can mitigate costs, but your 'dream home' can still become a stressful unpleasant place to live.

Cakeguts

Your solicitor should have realised about the access when they did the conveyancing for you buying the flat.

bouicca21

Does the freeholder give you access rights via the lease?