Buying a house - indemnity insurance policy

dinevad

Hello everyone, 

My partner and I are in the process of buying an extended semi-detached house and we are quite far into the process (i.e., about to exchange contracts and the sellers are waiting for us). The issue however is that our survey returned a potential structural issue with the floor of the extension as well as the solicitor uncovered that a restrictive covenant had been breached by erecting the extension and a building regulation has not been obtained for a removal of an internal wall in the extension. For these the sellers are going to provide us with two separate indemnity insurance policies. In addition to these, we have asked two independent builders to further inspect the state of the deflecting floor in the extension, which we are currently waiting on. I am however still quite concerned about the whole situation - two indemnity policies as well as a problematic floor (according to the surveyor the floor joists will at best require strengthening and at worst replacing). 
We are looking to buy the house as a shorter term solution e.g. 5-6 years maximum and re-sell in future, but I am concerned about the implications this extension will have on that?

I would be extremely grateful for any feedback/opinions from both sellers and buyers who have had to deal with similar issues before. Would our situation be a common occurrence and I am simply overreacting or is this something that could potentially be a reason to pull out of the sale? 

Many thanks in advance, 
Denitsa 

eddddy

Just to clarify - the indemnity insurance won't pay the cost of strengthening the floor joists or replacing the floor joists.

If you want that done, you will have to pay for the work, and it's likely to be very disruptive. So you should get some quotes to find out how much it would cost, and how long the work will take. Then you can decide whether you want to reduce your offer, walk away or whatever.

dinevad

Hi Eddy, 

No, these are two separate issues, perhaps I didn't explain it very well. The indemnity policies will cover the lack of a building regulation for removing an internal wall as well as breaching a restrictive covenant by erecting the extension in the first place. The floor is a separate issue where we will be getting quotes from independent builders and like you suggested decide whether to reduce the price or walk away. What my concern was that altogether there is almost too much going on - two indemnity policies as well as a botched floor, but perhaps I shouldn't be so concerned about the indemnity policies as the floor we can deal with and negotiate the price based on the quotes. I just don't understand how common these policies are and how much of a risk this extension would be given its current state to selling the house in the future, for example. 

Many thanks, 
Denitsa

davidmcn

Indemnity policies adequately cover the risks, which are tiny (that's why the policies cost peanuts). And the historic works will be even more historic by the time you sell.