Reducing an offer made due to lack of extension papers

AngieAnn

Hello,

We are currently in the process of buying a house which has a ground floor extension. The solicitors have confirmed to us that there is no planning permission or a certificate of lawfulness for the extension and that we could take an Indemnity insurance from the current seller and continue with the purchase. The seller says that there was no planning permission required in this case.

My question is, is that a valid reason to want to drop the price and how much would be acceptable?

I would like to add that, the reason behind this is also the fact that houses in the area/neighbouring streets have dropped their sales prices in the last 2-3 months and the last few sales were lower than the ones from 3 months ago which indicates to us that we are currently overpaying. When taking the extension issue into account as well, we have become concerned. BTW there is no chain so we would not be causing delays to anyone but the seller (and ourselves).

Thank you for your help

davidmcn

AngieAnn wrote: »

We are currently in the process of buying a house which has a ground floor extension. The solicitors have confirmed to us that there is no planning permission or a certificate of lawfulness for the extension and that we could take an Indemnity insurance from the current seller and continue with the purchase. The seller says that there was no planning permission required in this case.

My question is, is that a valid reason to want to drop the price

Not really, no. Has anyone suggested it might be? How old is the extension? Is there actually a problem with it other than the lack of paperwork?

steveodan

Hi AngieAnn,

Personally I would pay the Indemnity Insurance and move forward with the purchase at the agreed price. If you asked me for a discount I would not give one.

Also how would you feel in reverse if prices had increased in the last 2 - 3 months and the seller asked you for more money to take account of this? Would you increase your offer in that instance?

Doozergirl

Single storeys often fall under Permitted Development and no paperwork is required for planning purposes. The whole point of Permitted Development is to reduce red tape. One only needs to check the extension against the rules for PD.

https://www.planningportal.co.uk/info/200130/common_projects/17/extensions

So no, an extension that falls under PD with no paperwork is not a reason to drop the price. *No indemnity would be required* either as there's nothing to indemnify against.

Even if it needed PP, it becomes lawful after 4 years. There's no demonstrable loss in value from the planning perspective.

PField

The indemnity insurance will prmairy be to cover the lender and for the purchase to go ahead, but as others have said it is of no value and is buying with case, would be something you can dispense with. As you solicitor is also acting for the mortgage company, you may be obliged to obtain it.

G_M

1) how long ago was the extension built?

2) have you checked if Planning Permissiion was required or whether it fell within Permtted Development?

3) IF PP was required, and if it was built in the last (4, I think?) years, then either take out an indemnity policy or walk away

4) Consider Building regulations too - far more relevant. To what standard was the construction?

5) You are confusing price reduction because of the lack of PP, with the general markett prices in the area - which is your real concern?

Doozergirl

PField wrote: »

The indemnity insurance will prmairy be to cover the lender and for the purchase to go ahead, but as others have said it is of no value and is buying with case, would be something you can dispense with. As you solicitor is also acting for the mortgage company, you may be obliged to obtain it.

If it is PD then the OP's solicitor needs to do their job properly and not buy unnecessary policies because they don't know what Permitted Development is! They are acting on behalf of the mortgage lender, but lenders don't demand policies for perfectly legitimate extensions.

Crashy_Time

AngieAnn wrote: »

Hello,

We are currently in the process of buying a house which has a ground floor extension. The solicitors have confirmed to us that there is no planning permission or a certificate of lawfulness for the extension and that we could take an Indemnity insurance from the current seller and continue with the purchase. The seller says that there was no planning permission required in this case.

My question is, is that a valid reason to want to drop the price and how much would be acceptable for a 435k property?

I would like to add that, the reason behind this is also the fact that houses in the area/neighbouring streets have dropped their sales prices in the last 2-3 months and the last few sales were lower than the ones from 3 months ago which indicates to us that we are currently overpaying. When taking the extension issue into account as well, we have become concerned. BTW there is no chain so we would not be causing delays to anyone but the seller (and ourselves).

Thank you for your help

You are definitely over-paying, you need to drop the price IMO, at least to last sold price for the street (IMO you will still lose out if rates rise or a price correction happens for another reason) If they took short cuts with the extension what else might not be up to scratch?

Wobblydeb

It might well have been built within permitted development rights. Even if it was, building regulations approval should have been received for quite a number of things. An indemnity policy will not pay out if there are rubbish foundations, dodgy wiring or incompetent plumbing.

lincroft1710

After the chocolate teapot and chocolate fireguard is the indemnity policy. It will indemnify you should the council demand the extension be demolished, which never happens in 99.99999% of cases because planning and building regs depts of councils do not patrol the streets looking for non-compliant extensions!

juniordoc

It sounds like you offered too much in the first place and the lack of papers for the extension is a convenient excuse.
I think if you try and pin it on the extension then the seller may refuse to accept a lower offer.
You may have more chance if you present a reasoned argument that prices in the street are falling and that if they were to pull out of selling to you, then their house might get even less if they were to re-market it now.
Good luck with your negotiations!