Indemnity Insurance

Poppycat68

In process of buying a house - close to exchange, but they do not have the buildings regs certificates for the windows (which they replaced) - other work they had done, is certified.

My lawyer suggested indemnity insurance, however reading the small print it does not seem to be worth the paper it's printed on - it insurances against enforcement action but prohibits seeking a retrospective certificate.

At the end to the day to me, buildings regs are legal requirements and they failed to do what they were legally required to do, so they would put right. In this process I have already got a £2k discount as something came up on the survey that I could not have known on viewing and I asked that they either make good or discount so i could. They accepted discount - and we got a reliable quote for that.

I have therefore suggested that they seek a retrospective certificate and the building control said that they make appointments for this time of think within a week (max 2) of application. So to me it won't delay the process too long.

I set this out on Tuesday, and still no response.

In my mind, they either know the windows are fine, in which case this is admin, or they know there is an issue and so won't want to

Does anyone out there think this type of insurance is any good ? Seems pointless to me

middleclassbutpoor

You are right that the indemnity just protects you against enforcement.

If they were not installed by an installer that can produce a certificate and they go back to building regs, you cant then fall back on an indemnity as that invalidates it.

Likewise the vendor may be reluctant to do that because if you decide not to proceed then future buyers who may be happy with just the indemnity because they feel that the install looks sound, they will be stuffed there then.

davidmcn

The risk is that the council come out, decide there is some infringement which needs rectified before they sign off, and the seller then incurs more cost in sorting that out, with everyone having to hang around while that happens (and nobody would then have the option of getting indemnity insurance because you've tipped off the council).

In reality, the council isn't going to carry out enforcement action anyway.

The insurance means everyone can just move on with the transaction without the additional delay and cost.

Poppycat68

But the cost of the insurance is the same as the cost of the retrospective certificate - and if the council say that they do appointments within a week - that's not really a delay.

It seems to me that the insurance is a waste of money/time.

I can understand reluctance in case I pull out, but they are going to come across this with any purchaser, and i for them there is a risk the windows aren't up to code - but surely the insurance then just puts the risk onto me. There doesn't seem to me as a buyer any benefit to the insurance, but for the seller, yes as they don't have to verify widows are to code, which if they aren't is going to have a cost (most likely in drop of sale price.

As I said we are now close to exchange and this seems to be the last thing- but they are going to come across this issue with anyone who puts in an offer

middleclassbutpoor

Well I wouldn't do it if you were my buyer.

If the windows had caused me no issues and there wasn't anything that had come up in the survey to suggest there was an issue with them outside there being no certificate then it's not something I would be keen on doing.

It's the risk you take as a buyer sometimes. If you're buying an older home, you need to be comfortable with the fact that you are buying a house with history and these kind of things are pretty common.

davidmcn

Poppycat68 wrote: »

But the cost of the insurance is the same as the cost of the retrospective certificate - and if the council say that they do appointments within a week - that's not really a delay.

But there is at least the risk of a further delay if the council decide they want something else done and another inspection.

It seems to me that the insurance is a waste of money/time.

Not your money, and it doesn't take any time at all to arrange - the policies can be arranged instantly online.

I can understand reluctance in case I pull out, but they are going to come across this with any purchaser

No, most purchasers will be happy with indemnity insurance.

surely the insurance then just puts the risk onto me.

Which you then pass on to the insurer to sort out.

There doesn't seem to me as a buyer any benefit to the insurance

The benefit is that you can proceed with the transaction quickly - and also, you then already have the cover if you're asked the same question at a future remortgage or sale.

Linton

The main point of indemnity insurance seems to be that the solicitors can stop arguing about the issue and can move on - reducing the cost, worries, hassle and delays in buying or selling a house. I dont think anyone expects there will ever be any claims against the insurance.

Poppycat68

"Well I wouldn't do it if you were my buyer. "

This is what I don't understand. Buildings regs are legal requirements. Following them is part of the law, it's not optional. So the householder in replacing the windows failed to follow the requirements by not getting the certification - this is why I think it's necessary - did they go cheap, did they go with a cowboy ? I have no way of knowing.

Other work they did to the property was certified and certificates registered with the council.

People seem to treat legal requirements as something optional because they can get away with it, in which case why have the laws ?

My survey said that there was no obvious defect but I should ask for the building certificates, as they had clearly been replaced by the current owner.

"If the windows had caused me no issues "

I don't know if the windows have caused them any issues - the building has been empty for a year, they rented it out the year before and they lived in it before that. There is damp that came up on the survey which is located under one of the windows. Usually damp rises from the floor, as result of faulty damp course, but it seems like a bit of a coincidence.

Surely if the windows had caused them issues they would be even less likely to get retrospective certificates - if the windows had causes no issues, then this is just admin

I still want to by the property, but if the windows are sub standard, I would want to pay less for it than I currently aim - this shouldn't be considered unreasonable.

middleclassbutpoor

It's not for me to answer to why people don't get the right certificates but it happens and in the grand scheme of things - a missing certificate which is a self certified piece of work by the installer isn't a massive issue imo. Building Regs won't often check the work of these traders.

If you want a certificate - ask your buyer. If they don't want to get one, you will need to decide what you want to do.

If you are doing it just as a way of negotiating the price down then ask for a price for s discount but your solicitor will still want an indemnity. Hopefully you wont be expecting them to pay for that as well?

Poppycat68

I'm happy with the price, unless I find I need to replace all the windows in the next year. The property does need work, but priced accordingly.

Having just read the buildings regulations - they are pretty high level and windows will meet it.

I've asked if they will get a certificate - if they say no and offer insurance, it looks like i should accept that.