Would you buy a flat with indemnity insurance?

spark38

Im looking to buy a leasehold flat however there has been a couple of rounds of work done without the freeholders permission. Should I cut and run?
One set of work includes a loft conversion (the loft is within the leasehold) and has the building regulations attached however because freehold consent hasnt been provided - they have covered this with insurance BUT when I viewed, part of the plan was to replace the windows and doors out to the roof terrace. Will this invalidate the insurance? And where do I stand with wanting to do the work? 
In regards to the second set of work, this was moving the internal set up (bathroom and kitchen) - I think I'm OK with getting the structural walls and electrics checked. This also is covered by another insurance policy but I dont have plans to change this set up. 
Any advice would be appreciated! I do want this property but am worried about the long term impact. 

princeofpounds

Indemnity insurance should cover you for financial loss but will not technically stop the freeholder from enforcing the lease terms.

However, approval for work is generally held by tribunals not to be unreasonably withheld, so if the loft conversion was demised to the leasehold title then I would imagine the chances of you being ordered to undo it are basically minimal. Same with the bathroom and kitchen move, assuming the structure has not been compromised.

However, the windows and doors are another question, as they may well not be demised to the leasehold. Indeed you may not technically have roof terrace access (any idea?) - it's often not demised to the leasehold title either. So do look into that.

I wouldn't imagine that doing more work would invalidate insurance on existing work. But of course it wouldn't be covered.

Anyway, ask your solicitor.

spark38

Thanks you! The roof terrace is within the leasehold so I'm OK there.
As you said the likelihood of having to undo it are minimal from everything I've read but good to have another opinion so thank you for your reply. 

letsbetfair

Is there any chance the freeholder might attempt an upwards extension of the building? That could be an issue...

allygate

@spark38 Is this a house conversion or purpose built block of flats? As princeofpounds says, it's very unlikely that you would be forced to undo this work but whether the freeholder will use this as an excuse to try and extort something depends on the nature of the freeholder.

Going out on a limb, given that a whole loft conversion has been carried out (at least a few days work, visible externally, etc) I would presume the freeholder is pretty relaxed about this. But, the freehold could always be sold on, etc

I have unfortunately had more than one bad experience with predatory freeholders on flat-conversions and sworn off anything leasehold and if I was in your place I would steer clear unless there was a substantial discount compared to a similar property.

Indemnity insurance policies are cheap and easily invalidated based on who knows what about the potential issues that are being insured against.

spark38

Thank you both - appreciate the replies. 
It is a purpose build block but only consists of 2 marionettes therefore I think there would not be scope of upwards extension (no other buildings on this street are higher than the loft conversions) and the roof terrace is specifically called out in the lease. 
In regards to the freeholder - it seems (and I could be wrong) they are very absent and hence consent has not been obtained. You comment on the visibility and work was why I dont think it will be an issue (one of the freeholders owns the flat on the ground floor so would have been well aware of both sets of work depending on how long they had been there) however it was the additional work to the windows that I was questioning.
I would love to steer clear of leasehold but unfortunately my finances dont stretch that far in London!