Indemnity Insurance Stalemate . . . .

tonydee

We are in the process of buying and selling a house. We have had to take out an indemnity policy on our extension as there was lack of consent when it was built.

We have been informed by our solicitor that the place we are going to also requires this indemnity policy as they was a breach of the title when a bedroom extension was built in 1996.

The vendors solictior is saying they do not require the indemnity policy as the builder has gone into liquidation so there will be no comeback. Our solictior has said we need proof of this as our mortgage lender will require either proof or the indemnity policy.

We have now heard that the vendors solicitors cannot prove that the builder has gone into liquidation but also stated that the mortgage lender does not require the indemnity policy.

Well obviously someone isn't playing ball and just wondered if there were any opinions on here about this?

Running_Horse

How badly do you want this to proceed? We paid all indemnity policies requested because we had good buyers. Can you research what happened to the original builders yourself?

silvercar

If you want the sale to proceed, pay the policies and move on.

Doozergirl

Because there are no hard and fast rules on who pays for indemnity policies- indeed whether they are really required (much of the time they are purchased to save going through a long, convoluted process of checking back with the mortgage company and the 'computer says no' mentality), then sometimes the only way to move forward is to throw money at the problem.

I would have one last go by phoning the EA and telling them that an indemnity is required and that your solicitor won't proceed until it is bought. Could they please talk to their client about it as the solicitors are just arguing about it. Hopefully then your vendor will just cough up.

If they don't, then you'll have to bite the bullet.

tonydee

Thanks for the input guys and gals.

This saga had been going on for a couple of weeks but we hear today that the vendor has decided to pay.

Roll on the 12th December.

Richard_Webster

Because there are no hard and fast rules on who pays for indemnity policies- indeed whether they are really required (much of the time they are purchased to save going through a long, convoluted process of checking back with the mortgage company and the 'computer says no' mentality), then sometimes the only way to move forward is to throw money at the problem.

Whilst I think she slightly oversimplifies the issue, there is a lot of truth in what Doozer says here.

Sometimes if a company has gone into liquidation the chances of a problem arising are so small they can be ignored but it is a judgement call for solicitors and it may depend e.g. on local knowledge about the particular company.

The words I bold italicized above are a major problem for solicitors all the time. We do do some things simply because it is easier than delaying everything by asking the lender and possibly getting an unpredictable and unwanted reply.