Extension without planning, building regs, or covenant approval

EYDavis

We are working through the process of buying a house built in 1900. At the last minute, it has become apparent that two changes have been made to the property over the years without planning permission, building regulations approval, and in breach of a restrictive covenant, which is in favour of the National Trust.

The first development is the addition of a single storey garage extension (1968) and the second is the conversion of a former integral garage into a living space (1990).

We are being told that the way forward is to buy an indemnity policy (around £500), which would cover expenses in the event that enforcement action was taken by the local authority or the National Trust. However, this would likely not compensate for the loss of value to the house (which might be considerable) if the unauthorised works were reversed. The policy could be transferred with the house for the benefit of future owners.

These policies are usually invalidated by any attempt to inform third parties and so accepting this arrangement would mean we could not seek retrospective planning permission and covenant approval in the future.

All our solicitor will advise is that the risk of enforcement action so many years later is low. However, the risk is not zero and no-one can really say what impact this might have on re-sale. Clearly it is causing us some anxiety and we presume that future buyers would feel the same way.

The current offer price is around £1M, which is a reduction from an original asking price of £1.2M but still probably at the high end of what it would otherwise probably sell for in the current market.

So should we (a) buy and try and make things "right" at our own expense, (b) buy an indemnity policy, (c) make the seller buying an indemnity a condition of sale, (d) ask for a price reduction to share future risk with the seller or (e) run a mile?

davidmcn

From a planning and building control point of view, the alterations are ancient history and there's no real risk of any enforcement action. In fact the council are probably out of time to do anything legally. I can't see any buyers getting excited or even demanding indemnity insurance.

The covenant may technically be more of an issue, but obviously the NT haven't shown any interest in 28+ years so why would they suddenly take the notion / expense to complain?

I would just get the indemnity cover (quibble about who ought to pay for it if you like) and relax.

avacapri

you should consider the future value, when you come to sell this could be an issue, i would look to see the value of the property if these changes were reversed and negotiate the purchase price from that point

maisie_cat

avacapri wrote: »

you should consider the future value, when you come to sell this could be an issue, i would look to see the value of the property if these changes were reversed and negotiate the purchase price from that point

Much of any action you take depends on your attitude to risk. There may be little effect on the value if the changes were reversed and the chances of anything happening in respect of ancient changes is probably on a par with being hit by a bus. What is your risk attitude to crossing the road?
If you are very risk averse I would withdraw and buy something that does not give you the jitters.

davidmcn

The risk is tiny. If it weren't, the insurers wouldn't be offering cover at all, never mind indefinite cover for a one-off payment of £500.

EYDavis wrote: »

However, this would likely not compensate for the loss of value to the house (which might be considerable) if the unauthorised works were reversed.

When you say "likely" do you mean you haven't checked yet? Generally policies will include this as a last resort.

In any event, many people would regard replacing a 1960s garage as an improvement!