Non-compliant loft conversion - run?

jncr

I'm currently pretty deep into the conveyancing process of a house purchase in the London outskirts; it was advertised as a 4-bed Victorian terrace, with a loft conversion. It's a fairly small-scale loft conversion - 2 velux, flooring, fixed staircase, no roof line alterations

Our surveyor noted the loft floor was sloping, and the ceilings beneath were slightly bowed and cracked, and noted a few things that would be immediate B regs fails (no fire door, no alarm), which set off alarm bells. The seller says the loft conversion was done spring 2020, but our searches show that building regs were neither sought nor granted.

The seller arranged a structural engineer who couldn't make invasive investigations, but believed that the sloping floor was not caused by structural failure and commented that there was no discernable deflection or movement under foot traffic. According to sketches the seller showed the SE (which I've been unable to get a copy of) the builder "has used the existing roof structure with nominal structural strengthening." the existing joists are noted as 55x75mm (presumably 3" x 2") at 300mm centres, but the visible cross-section of floor next to the staircase is 350mm thick. I know the only real answer is "lift the floor and look" but what else could feasibly be in there?

This seems like an obvious lemon, especially written out like this, but I'm having a really hard time convincing myself to pull out - we've already spent months and thousands on this, and I'm worried about being priced out in the future if house prices accelerate quicker than our flat's value. We can't afford to tear the loft out and start from scratch.

We should walk away, right?

foxy-stoat

Value the property as if the "loft conversion" wasn't there, it should be described as storage area, not habitual.  If they have priced the property as 4 bed with 1 bedroom in the loft then offer based on a 3 bed.

Doesn't sound like they have installed new steel beams, increased insulation, just boarded out the loft and put a staircase in.  It wont be compliant as a habitual room nor should it be described as one.

So the seller paid for a SE to comment without investigations that all is well?  They didnt engage a SE when they carried out the work?  They have probably had other buyers pull out.  

If it were me and I really wanted the property I would kick them in the balls and reduce my offer by 15-20K and walk away if declined.

user1977

If neither the surveyor nor the engineer have identified significant structural problems then I might take a view on it. Bear in mind (if you do plan to go ahead) you'd want the report from the structural engineer to be addressed to you, if you want to rely on it. If the vendor instructed the engineer then normally the vendor would be the only party who can rely on the report.

AlexMac

Agree both of the first replies above, except that I'd be saying that an extra bedroom in the  London outskirts could potentially be worth more than £10-15k depending on area, foxy-stoat. 

And yes, user1977; unless you instruct a Surveyor you cannot then rely on their report, nor sue against their professional indemnity insurance (although I suspect any survey will have caveats that make any legal claim impossible).

The other consideration is how long you plan to stay there?  If you have misgivings, so will any prospective buyer, and I have noticed in the course of many house purchases over 45 years that buyers and their solicitors have become far more risk averse and demanding; a phenomenon more likely to tighten than to relax in the years ahead. 

So if your buyer is a harder negotiator than  you, or if you are unlucky enough to be selling in a "buyers' market" (as opposed to the current opposite "sellers'...") you might take a hit on the re-sale price. 

We had an experience a little like yours in that we found when we bought 10 years ago that a downstairs internal wall had been removed, presumably 10-20 years prior, again with no evidence of building regs or engineers' report at the time, and before the then owner (our seller)  had bought it.  He'd commissioned an engineer's survey which had given it the all clear when he bought.  We didn't bother paying for another one; as there was no sign of bowing or plaster cracks.

But houses are for lliving in, not investments, and if you plan to be there 10-20 years, and if, as you say, you are really keen to proceed, you could take the view that if the price is right, you will have time to regularise the problems and make it legal (or at least, regs compliant)

And having owned several Victorian/early 20th Century houses, I know how physically resilient they are.  I'm no surveyor but while it might be unwise to store gold bullion up there, it's probably not going to collapse!

So I guess you might well end up proceeding?

jncr

foxy-stoat said:

So the seller paid for a SE to comment without investigations that all is well?  They didnt engage a SE when they carried out the work?  They have probably had other buyers pull out. 

The seller's an architect by trade, so just passed some drawings to a builder, I believe. They got an SE once we started asking awkward questions, but without lifting the floor I can't put much stock in his report - it's just two professionals guessing and coming to different conclusions, which is a hell of a coin toss to put £600,000 on

AlexMac said:

Agree both of the first replies above, except that I'd be saying that an extra bedroom in the  London outskirts could potentially be worth more than £10-15k depending on area, foxy-stoat.

So if your buyer is a harder negotiator than  you, or if you are unlucky enough to be selling in a "buyers' market" (as opposed to the current opposite "sellers'...") you might take a hit on the re-sale price. 

So I guess you might well end up proceeding?

There aren't a huge number of direct comparables but I'd probably be asking for a bit more than that. My fear is that it's a timebomb at any price though - as you say, the next buyer will find the same problems, buyers and regs will get harder to please and we might be left holding the bag

I really don't know what to do; it's a very charming house and it could be a lovely home, but it also has the potential to be an absolute money pit. My gut says not to proceed, but for some reason I just can't bring myself to pull out. Part of me hopes that when our lender gets wind of the survey they just call the whole thing off, solely so it's not my decision any more

dj1471

IMO there’s no excuse for not getting the work done to regs and signed off accordingly, especially with it having been done so recently.

I’d reduce the offer significantly to budget for potential remedial work and retrospective sign-off. It will come up when you sell so you need to get it sorted if you choose to proceed with the purchase.

I’d be concerned about the ceilings too. If they’re original lath and plaster ceilings they have a habit of falling down in chunks and make a hell of a mess when they do. You should budget for getting them boarded or replaced depending on their condition.

Section62

jncr said:

The seller's an architect by trade...

So zero excuse regarding not knowing the requirements for approvals etc.

Someone carrying out work without the required approvals is always a concern. Someone knowingly doing work without the required approvals would be a showstopper to me.

The structural adequacy is only one factor.  I would also be concerned about fire safety, electricals, ventilation and insulation.

I'd also expect an architect doing work of this kind on their own home to retain copious documentation and detailed photographs of what was done - if none of that is available I'd be running, not walking.