CRL warranty not accepted

adart25

Hi, 
sorry if I've missed something but i'm in the process of buying a brand new leasehold apartment with a cal warranty and I'm worried after reading this thread whether I should be proceeding on the basis of the warranty, can anyone give any advice? 
thanks in advance. 

Warrantyexperts

adart25 said:

Hi, 
sorry if I've missed something but i'm in the process of buying a brand new leasehold apartment with a cal warranty and I'm worried after reading this thread whether I should be proceeding on the basis of the warranty, can anyone give any advice? 
thanks in advance. 

You need to be very careful.  The key is the insurer behind CRL.  The insurer used for most projects was Alpha who are in liquidation.  However, in some cases it was another company who continue to trade.  That insurer though was another unrated insurer based offshore and as a result of the issues around CRL many lenders have decided not to accept CRL Warranties at all.  So ideally check with your lender as to acceptance once you have copy documentation from the vendor.  That is the only way to be sure on your own lending but bear in mind the situation can, and probably will, change in the future so if you come to sell, it could still be an issue for you.  If you need further advice consult a professional specialist....although it potentially costs more in the short term, in the longer term it can save a lot of money and heartache.

Burton2018

Warrantyexperts said:

adart25 said:

Hi, 
sorry if I've missed something but i'm in the process of buying a brand new leasehold apartment with a cal warranty and I'm worried after reading this thread whether I should be proceeding on the basis of the warranty, can anyone give any advice? 
thanks in advance. 

You need to be very careful.  The key is the insurer behind CRL.  The insurer used for most projects was Alpha who are in liquidation.  However, in some cases it was another company who continue to trade.  That insurer though was another unrated insurer based offshore and as a result of the issues around CRL many lenders have decided not to accept CRL Warranties at all.  So ideally check with your lender as to acceptance once you have copy documentation from the vendor.  That is the only way to be sure on your own lending but bear in mind the situation can, and probably will, change in the future so if you come to sell, it could still be an issue for you.  If you need further advice consult a professional specialist....although it potentially costs more in the short term, in the longer term it can save a lot of money and heartache.

Hi. I purchased my flat in summer 2019, so a year after Alpha went bust. The flat was erected 3 years ago. We only found out a few weeks after we moved in about all of this and was left with this problem. Giving this has been ongoing since 2018 should this information not have been picked up by our solicitors when we were purchasing our property at which point they could have made us aware so we could have made the sellers get us an Alternative policy or not proceeded with the transaction? Would this not be info our sellers should have been aware of? Feel this is unfair and We’re now in a difficult position as we’re left with a flat with no warranty and from what I’ve seen the costs of a new warranty vary from £3k-£6k. 

I assume without this warranty we will have difficulties selling the flat within the next couple years?

Midge2020

@Burton2018.....I think you absolutely need to contact the solicitor who undertook the conveyance and send a registered mail letter (head of conveyancing) informing them of the circumstances (dates etc) and that you intend to complain (to the Law Society) and seek financial recompense. I’d be wanting to claw back the conveyance fees and the price of a new retrospective warranty plus your own work time....so add it all up and put in in writing. A good law firm should in turn, contact their insurers for a potential professional indemnity claim. They’ve let you down....no 2 ways about it. This ought to have unearthed during their searches and investigations - very very sloppy. The collapse of Alpha was industry-wide. Any self respecting conveyancing solicitor ought to have know this and protected your interests putting the onus back onto the seller.

saira172

The sellers may well not have been aware - the contacting process was woeful and has mainly been via word of mouth on newer developments. It is something that your solicitors should have picked up on though, it's what you pay them all that money for!

Burton2018

Midge2020 said:

@Burton2018.....I think you absolutely need to contact the solicitor who undertook the conveyance and send a registered mail letter (head of conveyancing) informing them of the circumstances (dates etc) and that you intend to complain (to the Law Society) and seek financial recompense. I’d be wanting to claw back the conveyance fees and the price of a new retrospective warranty plus your own work time....so add it all up and put in in writing. A good law firm should in turn, contact their insurers for a potential professional indemnity claim. They’ve let you down....no 2 ways about it. This ought to have unearthed during their searches and investigations - very very sloppy. The collapse of Alpha was industry-wide. Any self respecting conveyancing solicitor ought to have know this and protected your interests putting the onus back onto the seller.

Completely agree. This wasn't ground breaking news at the time. The company went bust in 2018 and I can see discussions on this website alone dating back to 2018. I find it laughable that this was never brought up. Whether the sellers had any information on this at all, this info should have been checked by people who were paid a lot of money to check. I'm surprised my lender wouldn't have wanted to check this info before proceeding.

Do you know what implications this will have on me if I am unable to obtain a warranty as this is proving difficult and expensive. i.e will I need to stay at the flat for the remaining 10 year term? Will I have to sell the flat at a loss?

CrazyM101

Hi mate, sorry to hear about your situation.
First of all, please read Midge2020's response as that has covered some of the follow up steps you should take. To be honest, the sellers may not even be aware of CRL's situation or could simply say that they left the legal work to THEIR conveyancers and as laypeople they have no idea about how the warranty process works e.g you may not be able to pursue them without clear evidence. Did they sign a piece of paperwork stating that the property has a valid warranty for example?

If the conveyancer does not help, you could try and sue them - they SHOULD have checked everything. Make sure you get legal advice on this first.

The mortgage company should have asked for warranty paperwork during their checks but not all of them do, and even if yours should have checked but didn't, I wouldn't raise this line of enquiry with them as they could easily invalidate the mortgage leaving you in an extremely difficult place.

The issue we're having is that we can't sell without a warranty in place and we can't change mortgage brokers. Renewals with the same lender don't require warranty paperwork for some reason.

You can sell cheaper than market price if you really need to sell or just hang on until warranty period is over - usually 7 years from build date so your warranty requirement should run out in 2024 (check the paperwork you were supplied or ask neighbours).

I raised a complaint with the FCA who failed to investigate properly, then the Financial Ombudsman, this has gone quiet since the Covid19 lockdown so will wait until we're out before I escalate again.

I hope you find a way out of this mess, good luck and don't give up!

Midge2020

@Burton - definitely try and get a firm quote for a retrospective policy for your property - go through earlier posts, collect names and get a quote. You’ve got to protect your asset. Whilst you certainly would loose money if you were forced to sell without a warranty, that sum will be far far more than the price of a new retrospective warranty. In tandem, put your solicitor on notice. This is a case of professional negligence. You’ve got to start quantifying the damage it’s done and the cost of making good the failed searches - and I’d include your own personal time in that figure.  You could consider using a professional negligence specialist or maybe Small Claims once you’ve got a robust quote and an overall figure.  Good luck!!

JDP90

Hi everyone,
I too find myself in the Alpha minefield – we live in an 25-flat apartment block so all of the other occupants are in the same position. Just wondering if many more people have been able to successfully take out their latent defect policies?

I spoke to a broker at PIB Insurance today and was told that "New Homes Warranty providers will be unable to provide a policy for individual apartments within a block" which makes sense, as any structural defect would obviously affect the whole block. 

We actually completed on our flat on 17 May 2018 – a week after Alpha went bankrupt – but by then all the checks would have been by the mortgage companies & solicitors. We've never heard from the FSCS, this has only come to light this due another resident having his remortgage application declined due to the lack of a valid latent defect policy.

Any advice on how we can rectify the situation hugely appreciated! We'd like to move at the moment, but will never be able to complete a sale with this hanging over the building. 

Sunshineyellow12

Hello I am also in the same situation and purchased in 2019, after alpha went into bankruptcy. @Burton2018 we are in the same situation, did you speak with your solicitor? We have just dropped ours an email. I find it amazing that this situation hasn’t yet been resolved and is being left to the leaseholds. It’s such a complicated and stressful situation. Not to mention organising all of the flats to now talk and try and put money upfront. Can anyone explain the difference been the warranty and a professional consultants certificate? Any advice and support really would be welcomed.