Illegal Basement Conversion - What Are Our Options?

mattberryman

Hi all,

I am a FTB and in the process of buying a flat with my fiancee. We have had the survey performed, mortgage approved and even signed, but not exchanged, contacts.

However, we have now found out that the flat's basement conversion has no planning permission or building regs approval. As such, we are now concerned as to whether our mortgage company will revoke the mortgage offer given that we are essentially buying a two-bed flat with no legal bedrooms!

I understand that it is very unusual for the Council's Building Approval dept to require any corrective work to be performed after the conversion is older than four years. However, if we were to continue with the flat's purchase, would we be able to take out some kind of indemnity insurance to protect the flat's future salability?

Also, how do we go about negotiating on our initial offer downwards in light of the lack of building regulations? Can we simply call the agent and withdraw the original offer and re-open the negotiations for a lower purchase price?

Thanks in advance for any help that you may be able to offer.

Matt

Running_Horse

It may still be possible to get it signed off. Our vendor did with an extension built years ago, but signed off during the buying process. This would call their bluff as to whether the work was done properly.

Doozergirl

Just because it doesn't have relevant paperwork, it doesn't mean that a room isn't a room. If the mortgage company is happy with an indemnity policy, then that's pretty much the end of that.

An 'old' house will have neither planning permission or buildings regs as they didn't exist. It doesn't mean that the house is illegal.

What is important is that you have a proper survey carried out and that your surveyor is satisfied that the conversion is sound with regard to damp-proofing and a fire escape route, especially. If he is happy, then there is no need to renegotiate the price, you simply ask them to pay for the indemnity policy.

guppy

I agree...as long as its priced sensibly, is not damp and not dangerous, then its unlikely to be a problem.

There's a far greater risk of paying over the odds for something substandard than there is of having building control bothering you.

theGrinch

when was the work carried out? is the building listed or in a conservation area?

Ian_W

I agree with the other posters but there is something that neither you or they have mentioned. It may be because it isn't an issue or you know it's OK - or it may be that you're unaware it could be one.

You're buying a FLAT and the vast majority are leasehold, so I'm assuming this one is, if it isn't it shouldn't be a problem. I'm sure you're aware that leasehold means a freeholder owns the building and you own a long lease to a specific part of it. I would be concerned that the leasehold owned by your vendors actually includes the cellar itself. I've certainly seen top floor flats where the loft space above is covered by the leasehold and belongs to a specific flat and others where the loft isn't covered and is actually still the property of the freeholder with no ownership asigned to a specific flat.

The surveyor won't, AFAIK, have seen a copy of the leasehold so will assume it's in the property's leased area. The only person who can tell you whether that's the case, unless you have a copy, is your solicitor. It PROBABLY will be in the lease but you still need to check whether they needed and obtained the freeholders OK [standard in many leases] to extend. They can obtain that retrospectively but it should be done before you buy as the freeholder can charge.

If the cellar isn't shown in the leasehold ..... :eek:

Richard_Webster

Just because it doesn't have relevant paperwork, it doesn't mean that a room isn't a room. If the mortgage company is happy with an indemnity policy, then that's pretty much the end of that.

An 'old' house will have neither planning permission or buildings regs as they didn't exist. It doesn't mean that the house is illegal.

What is important is that you have a proper survey carried out and that your surveyor is satisfied that the conversion is sound with regard to damp-proofing and a fire escape route, especially. If he is happy, then there is no need to renegotiate the price, you simply ask them to pay for the indemnity policy.(Doozergirl)

I agree with the other posters but there is something that neither you or they have mentioned. It may be because it isn't an issue or you know it's OK - or it may be that you're unaware it could be one.

You're buying a FLAT and the vast majority are leasehold, so I'm assuming this one is, if it isn't it shouldn't be a problem. I'm sure you're aware that leasehold means a freeholder owns the building and you own a long lease to a specific part of it. I would be concerned that the leasehold owned by your vendors actually includes the cellar itself. I've certainly seen top floor flats where the loft space above is covered by the leasehold and belongs to a specific flat and others where the loft isn't covered and is actually still the property of the freeholder with no ownership asigned to a specific flat.

The surveyor won't, AFAIK, have seen a copy of the leasehold so will assume it's in the property's leased area. The only person who can tell you whether that's the case, unless you have a copy, is your solicitor. It PROBABLY will be in the lease but you still need to check whether they needed and obtained the freeholders OK [standard in many leases] to extend. They can obtain that retrospectively but it should be done before you buy as the freeholder can charge.

If the cellar isn't shown in the leasehold ..... :eek:(Ian W)

I agree with both of these posts.

A surveyor will always say something like: "Solicitor should check that the relevant statutory consents were obtained..." If that's all hesays about the cellar then there's no major problem, but if he is critical of the construction and points out some actual faults then you need to consider the matter more carefully.

Ian W makes 2 points in his last paragraph and both need checking. If the cellar isn't in the lease then the lease needs to be altered to include it and the same document can incorporate a consent from the Landlord for the works. If it is in the lease then the alteration will probably still need consent from the Landlord. Your solicitor should make sure that these consents are obtained by the seller.

mattberryman

We're unsure when the basement conversion took place. The house was initially split up into flats in 1985, and the current vendor said that the conversion was done before they took possession in 2001, but we have no way to confirm that.

Yes, the house is in a conservation area.

Thanks for pointing out whether the basement was in the original leasehold, as that was something that we hadn't thought about checking, so I'll get our solicitor to check that out.

Thank you all for your help. Any other comments would be gratefully received.

Regards, Matt