Indemnity policies on house I want to buy

sarah124562

I've probably viewed every forum relating to this on the site right now but my situation has many unique complexities which I'll get into.

I'm a first-time buyer and will be buying alone. I have settled on where I want to live and have had several viewings. I really love one of the properties and am very interested in buying, but have a myriad of cons which are making me anxious about going through with making an offer. My family thinks I should go ahead and offer as they understand it offers everything I want other than some unfortunate (and potentially costly) legal issues.

So here are the problems with the property:
1) it is a leasehold house with an absent landlord meaning I would require AL indemnity policy (provided by the seller). This wouldn't really be an issue - leaseholds are common in this area and the homeowner is responsible for insurance, but an inconvenience for resale nonetheless.

2) the double glazed windows have no FENSA certification and noone appears to know when they were put in place. It's highly likely they were done prior to 2002 when FENSA was set up, but there's no evidence to support this. This may mean I will also need an indemnity policy for this (unless anyone knows different)

3) the biggie... It is listed as a two bed house but one of these bedrooms is in the loft as a loft conversion. There is no planning permission (although seems to not be required) but importantly, no building regulation certification. The loft seemed very sound to me as the layperson, and it is kitted out with radiators, electricity, carpet and funnily enough, a bed. The seller is a landlord who previously let out to a family and the son slept in the loft. Surely if a landlord has been able to rent out the house it has gone through some sort of checks? Will I be able to access the seller's homebuyer reports? I have been told that I can take out an indemnity policy on this, but of course the risk is my safety if I were to use the loft as a bedroom. Also, if I have an indemnity policy, does this mean I can't contact the council in future for retrospective building regs?

In conclusion, what would you recommend I do in this position? The house is excellent and i can see myself living there for a while. The first two points are passable for me, but the loft issue could end up being costly as I have spent the past two days researching. Is there a way I can get a quote on any potential changes to make it up to scratch for current building regs without committing to the sale (e.g. full structural survey)?

I understand that most responses will be to avoid this with a bargepole, but every house i have seen to date have had some major drawback e.g. lots of renovation to be done, bathroom to be replaced due to leaking into another room, etc.

At the very least, is it OK to just get indemnity policies for all three points and hope the loft doesn't cave in?

Apologies for all the questions and thanks in advance for any responses!

davidmcn

How old is the loft conversion? If it's ancient history then building regulations aren't really relevant (after all, do you have the consents for the original construction of the house?).

sarah124562

That's the issue, neither the seller or estate agent knows when the conversion was done. There's nothing in terms of building regs or planning permission documents online which suggests to me it was a very long time ago. It was sold in 2014 for conversion from a shop to a residential property (with planning permission approved) and then sold in 2016 to the current seller who let it out. I imagine it was converted even before the property was used as a business as the planning permission for converting to a residential property didn't mention anything about a loft conversion but did mention adding central heating.

sarah124562

Also I forgot to add it's a terrace built in mid-1800s

Cakeguts

Don't buy it if the price is for a 2 bed house. If it is priced as a 1 bed house with a nice accessable loft for storage only then that is fine. You don't want to pay for a 2 bed house where you can't use one of the bedrooms as a bedroom because it isn't up to recent fire regulations and will cost you more than a 2 bed house in the area will sell for, for you to bring it up to the safety requirements.

davidmcn

Weren't building regulations involved in the conversion from shop to residential?

sarah124562

Thanks @cakegut, I'd definitely say it is priced as a two bed, however it is of a much higher standard than any of the houses I've seen in this price range. As I'm buying alone it doesn't bother me so much about the loft, but I worry more about resale in the future! Other two bed houses in this budget are typically 1 double bed room plus a very small single bed room, whereas this one is spacious throughout. Very difficult decision!

Cakeguts

From what you have written in your OP it sounds to me as if you are trying to buy a bigger house than you can actually afford. You are trying to buy a 2 bed but you can only really afford a 1 bed house or flat.



If you try to buy a house that is more than you can afford you get all the bottom houses in the price bracket for a 2 bed so all the ones that need money spent on them which is why they appear to be within your budget. None of them actually are but they appear to be.



What you need to do is to look at smaller properties and look at the best ones in that price bracket so that you can buy something in better condition.



There is no such thing as a bargain property. If a property looks cheap that is because there is something seriously wrong with it that will cost you more than a similar property in better condition and more expensive to put right.


This latest one has the possibility of you losing a lot of money when you come to sell because of the loft conversion and all the other problems like the windows. Do you want to have to replace all the windows, sort out the loft conversion and all the other problems you will find in order to be able to sell it? The fact that the tenant's son slept in the loft doesn't prove that it is safe. The fact that there is a bed in it now doesn't prove that it would be safe in a fire it just means that someone has put a bed in there to try to convince gullible first time buyers to part with their money.

sarah124562

Good point about building regulations regarding the commercial to residential change. The planning permission is documented but I checked the building control register for the local council and nothing is there?! I wonder if regulations should be involved in this type of work?

sarah124562

Thank you for your honesty - probably what I needed to hear! All very good points, I'll give it another chase tomorrow to absolutely confirm there is no documentation around the work done on the house.

AdrianC

sarah124562 wrote: »

So here are the problems with the property:
1) it is a leasehold house with an absent landlord meaning I would require AL indemnity policy (provided by the seller). This wouldn't really be an issue - leaseholds are common in this area and the homeowner is responsible for insurance, but an inconvenience for resale nonetheless.

Or, once you've been there two years, apply for a vesting order to buy the freehold. Job jobbed, value added.

2) the double glazed windows have no FENSA certification and noone appears to know when they were put in place. It's highly likely they were done prior to 2002 when FENSA was set up, but there's no evidence to support this. This may mean I will also need an indemnity policy for this (unless anyone knows different)

I really wouldn't even begin to worry about that.

3) the biggie... It is listed as a two bed house but one of these bedrooms is in the loft as a loft conversion. There is no planning permission (although seems to not be required) but importantly, no building regulation certification. The loft seemed very sound to me as the layperson, and it is kitted out with radiators, electricity, carpet and funnily enough, a bed. The seller is a landlord who previously let out to a family and the son slept in the loft. Surely if a landlord has been able to rent out the house it has gone through some sort of checks?

Nope.

Will I be able to access the seller's homebuyer reports?

Nope. If they had one.
If you want a survey, get your own.

I have been told that I can take out an indemnity policy on this, but of course the risk is my safety if I were to use the loft as a bedroom.

Indemnity policies cover the cost of any legal enforcement action for lack of BR approval. No more than that. The chance of there ever being any is slim to zero.

Also, if I have an indemnity policy, does this mean I can't contact the council in future for retrospective building regs?

No, it just means that you can't contact them before you buy the policy.

In conclusion, what would you recommend I do in this position?

Stop worrying.

The house is excellent and i can see myself living there for a while. The first two points are passable for me, but the loft issue could end up being costly as I have spent the past two days researching. Is there a way I can get a quote on any potential changes to make it up to scratch

You have no idea whether it was "up-to-scratch" at the time it was converted, but they simply didn't do the paperwork, or if it was a godawful lash-up. You don't even know when it was converted. Perhaps it was before BR was needed? There is no way to know, either, without ripping walls and ceilings down to see what's behind them.

...for current building regs without committing to the sale (e.g. full structural survey)?

To current BR? Woah. That's a very different kettle of fish from whatever the BR specified at the time it was converted.

I understand that most responses will be to avoid this with a bargepole, but every house i have seen to date have had some major drawback e.g. lots of renovation to be done, bathroom to be replaced due to leaking into another room, etc.

Welcome to home ownership. That's what houses LOVE to do.

At the very least, is it OK to just get indemnity policies for all three points and hope the loft doesn't cave in?

An indemnity policy won't stop the loft caving in. A big enough stack of them might provide a bit of extra insulation, though.

sarah124562 wrote: »

It was sold in 2014 for conversion from a shop to a residential property (with planning permission approved) and then sold in 2016 to the current seller who let it out. I imagine it was converted even before the property was used as a business as the planning permission for converting to a residential property didn't mention anything about a loft conversion but did mention adding central heating.

Entirely possible. Back in student days, one place I lived was a flat above a shop - two floors of flat, one in the roof. If the shop were to be converted to residential, the loft could have remained untouched.