Local search indemnity insurance yay or nay

alvaronistal

Hello!

We're in the process of completing our first property purchase. We have everything sorted out, and the vendors have been waiting on us to exchange contracts and set a completion date since mid December, as the local authority search for the property we're purchasing is already on working day 52. Our solicitors keep saying the Council office are delaying it without any reason.

We are on a rental and the owner is already booking viewings to sell the house we're currently in. It's priced fairly so we don't think it will take them long to sell, so we have some pressure as we can be served notice (2 months) soon.

Add to this that for personal reasons we were looking to complete at the start of this month, and now we are looking at mid-February the soonest.

Our solicitors have advised that our lender accepts search indemnity, we didn't even know this was a thing, and although a couple weeks ago didn't consider it, now we seriously are.

It's a newish build (2002), and the only major change to the property have been a conversion from garage to studio in 2003, which is on the council planning control website, all approved. The rest has been kitchen refurbishment and window refurbishment (documented).

Is it crazy to take the insurance?

Thanks in advance,

Alvaro

davidmcn

alvaronistal said:

Is it crazy to take the insurance?

No, the risks are minuscule. That's why the insurance is so cheap.

greatcrested

alvaronistal said:

.... the local authority search for the property we're purchasing is already on working day 52. Our solicitors keep saying the Council office are delaying it without any reason.

What have council told you about their timesacles?

We are on a rental and the owner is already booking viewings to sell the house we're currently in.

That sem premature - your purchase might fall through. I assume you have not yet served notice so why are you allowing viewings?

It's priced fairly so we don't think it will take them long to sell, so we have some pressure as we can be served notice (2 months) soon.

No. Currently a S21 Notice must be for 6 months, not 2.

Our solicitors have advised that our lender accepts search indemnity, we didn't even know this was a thing, and although a couple weeks ago didn't consider it, now we seriously are.

It's a newish build (2002), and the only major change to the property have been a conversion from garage to studio in 2003, which is on the council planning control website, all approved. The rest has been kitchen refurbishment and window refurbishment (documented). Nothing to do with searches.

Is it crazy to take the insurance?

Well, insurance won't help in practical terms if something adverse turns up - only financially. That's why your lender may be happy with t (they don't have to live there). But you? Your choice.

alvaronistal

greatcrested said:
Well, insurance won't help in practical terms if something adverse turns up - only financially. That's why your lender may be happy with t (they don't have to live there). But you? Your choice.

Wiltshire Council local search office doesn't even pick up the phone, it's a direct voicemail. About timescales, their website they mention 32 - 45 working days, but was 20-30 working days just a month ago. They keep increasing the timescales.

About viewings, we'd rather be flexible. We're on a periodic contract and we will probably want to negotiate to leave the property on a month's notice, but not be tied to the contract date, so we want to be 'nice'. About the notice periods, as per the last letter from the Letting Agents it's 1-month notice from my side, 2-month from landlord side, but never knew that it increased to 6-month notice on Covid19 times, that's good to know. Thanks for that.

[Deleted User]

@davidmcn given there are lenders who will refuse to lend at certain ltv if a road is unadopted (for example), does the conveyancer have to undertake additional enquiries that would have been on the search results anyway?  Or is generally a case that the only lenders accepting indemnity are the ones who dont care about the results regardless of what they are? 

Mineral1

Personally i'd rather have the searches as issues may arise that could be quite disrupting to your life, and who is to say what you would get financially? I wouldn't want to rely upon the promise of some money if something untoward turns up, i'd rather know the score before buying somewhere, if nothing else it could give you some roof to negotiate on sale price etc. If the searches take up to 45 days that is not long in the timescale of buying a house.

davidmcn

Deleted_User said:

@davidmcn given there are lenders who will refuse to lend at certain ltv if a road is unadopted (for example), does the conveyancer have to undertake additional enquiries that would have been on the search results anyway?  Or is generally a case that the only lenders accepting indemnity are the ones who dont care about the results regardless of what they are? 

It's not that they "don't care about the results", it's that the insurers are taking on the risk of the lender suffering a shortfall because of any surprise issues which would have been thrown up by a search - it's an alternative to relying on the solicitor's due diligence.

In any event, I would say it's fairly uncommon for the search to raise any surprises - unadopted roads are generally fairly obvious on the ground, or by the time you've got e.g. the pack from managing agents detailing what they're maintaining.

alvaronistal

The solicitors just told us today they had the Local Search report since Monday. They were just reviewing it. So lazy.
Thanks everyone anyway!

badger09

So lazy. Really?
Presumably you are the solicitor's only client? 

greatcrested

alvaronistal said:

The solicitors just told us today they had the Local Search report since Monday. They were just reviewing it. So lazy.
Thanks everyone anyway!

You have to be kidding!?

So it arrived maybe Monday afternoon. Solicitor got it on his desk Tuesday AM.

Solicitor spent Tuesday dealing with a last minute crisis with an Exchange due that day, plus reviewing other clients' files that were already on his desk plus... plus

And today Wed updated you that he has it and is reiewing.

Nothing 'lazy' there.

Your attitude suggests that you because you are only buying one property, you expect your solicitor to be only conveying one property. Presumably sitting in his office (or at home) twiddling his thumbs waiting for your searches to arrive.....