Lack of Building Regulations Indemnity Insurance Policy

stickygoblin

Hi,

We are in the latter stages of purchasing a property, built late 1800's in a conservation area.

It is a large townhouse that has gone through a number of changes over the years and includes a flying freehold on the upper floor and we are flown over on the basement floor.

During our DD we discovered from a neighbour and from looking at planning applications for the surrounding property that there were bay windows to the rear. These were removed in 2015 without planning consent.

This was something we were looking to re-instate or to add a balcony in order to take full advantage of the views.

We then discovered from a neighbour that the property did have bay windows but they were removed without planning consent. There is no Building Regulations Completion Certificate for these works and, accordingly, we have been offered a Lack of Building Regulations Indemnity Insurance Policy.  The effect of this will be to provide us with financial assistance should the Local Authority deem it necessary to take enforcement action against us in respect of this breach.  The “financial assistance” would be provided if, for example, the Local Authority requested that you make a retrospective application for a Completion Certificate.  However, it is a condition of the Policy that the Local Authority is not notified of it – to do so would render the policy invalid. 

We are not sure how to proceed as we want to add them back but the indemnity insurance will mean we cannot apply for planning permission or any building regulations completion certificate. as far as we understand. From what I have read this insurance is not worth the paper it's written on in all honesty. 

We love the house and the location and the price is excellent for the size of the property in the area but as - essentially a first-time buyer I have never come across this issue.

Can we force the seller to get retrospective planning consent as it was only 6 years ago or do we just go ahead and risk not getting planning consent for any changes we want to make (I think this might be a big risk).

or can we negotiate the price down to leave something to replace the bay windows which we want to do anyway? 

It is worth noting that the seller also owns the building that we have the flying freehold over next door - it is a homeless shelter for people of low risk with wardens so it's a business and not a private residence. This might make the relationship difficult in the future should they take a dim view of us negotiating or even jeopardise the sale.

We are buying cash but will be seeking a mortgage in order to complete renovations which again may be an issue without the proper planning in place.

Hopefully, someone has some great advice as I am all at sea with this issue.

user1977

It's out of time for the council to take enforcement action either for planning or building regulations, so there's not a great deal of point worrying about that happening or getting insurance against it anyway.

stickygoblin

Thanks for the reply. Just to be clear - if the works were completed over 4 years ago then there isn't anything they can do about it now anyway so the point is mute even if we apply for planning to reinstate the bay windows?

Section62

user1977 said:

It's out of time for the council to take enforcement action either for planning or building regulations, so there's not a great deal of point worrying about that happening or getting insurance against it anyway.

But only if the building isn't listed, and/or an enforcement notice hasn't been issued already. And also on the assumption that one of the other grounds for disapplication of the time limits (e.g. concealment) isn't relevant in this case.  The OP needs to do some more research to confirm whether or not this is the case, notwithstanding they may want to undo the previous removal work.

stickygoblin said:

We then discovered from a neighbour that the property did have bay windows but they were removed without planning consent. There is no Building Regulations Completion Certificate for these works and, accordingly, we have been offered a Lack of Building Regulations Indemnity Insurance Policy. The effect of this will be to provide us with financial assistance should the Local Authority deem it necessary to take enforcement action against us in respect of this breach. The “financial assistance” would be provided if, for example, the Local Authority requested that you make a retrospective application for a Completion Certificate. However, it is a condition of the Policy that the Local Authority is not notified of it – to do so would render the policy invalid.

We are not sure how to proceed as we want to add them back but the indemnity insurance will mean we cannot apply for planning permission or any building regulations completion certificate. as far as we understand. From what I have read this insurance is not worth the paper it's written on in all honesty.

The completion certificate isn't really an important issue in this case, as if the works you plan will undo the previous work then by the time you come to sell you will have your own completion certificate for your own (legitimate) works.

Planning is more likely to be troublesome. Don't just assume you will be allowed to replace what was there before. You'll need to get hold of the council's conservation officer and have a discussion about what would be acceptable.

Not communicating with the council in a case like this isn't an option, hence the indemnity policy is likely to be a waste of good paper.

I'd also want to know why they decided to remove the bays and how the work was carried out. Was it because they needed (expensive) maintenance? Was it something to do with the use of the building? Bay windows can sometimes have a structural function, so on top of doing this in a conservation area, the failure (by a business) to comply with legislation when managing their property would ring all kinds of alarm bells, particularly as your property would be so interconnected with their property.

Don't worry unduly about the future relationship with the sellers. You are within your rights to make sure you are protected against the consequences of what appears to have been unlawful activity by a business. If they are public sector or a charity there will be additional duties on them to behave properly, and potential routes to complain if they don't.

stickygoblin said:

We love the house and the location and the price is excellent for the size of the property in the area

That might be due to the nature of the neighbouring property.  Don't underestimate the reduction in value of a property next to a building used for anything that some people wouldn't want to live next to, even if you don't see it as an issue yourselves.

Also bear in mind that the current arrangements (e.g. the 'low risk and wardens') could change in future without you having any say or comeback. E.g. ask yourself whether you would still buy if, say, you knew the the wardens were being removed due to budget cuts.

RedFraggle

s

stickygoblin said:

We love the house and the location and the price is excellent for the size of the property in the area

That might be due to the nature of the neighbouring property.  Don't underestimate the reduction in value of a property next to a building used for anything that some people wouldn't want to live next to, even if you don't see it as an issue yourselves.

.

This! There was a halfway house on a street I used to live on and it substantially affected sales of neighbouring properties

stickygoblin

 You'll need to get hold of the council's conservation officer and have a discussion about what would be acceptable.

This would void the indemnity I guess as it's drawing attention to the issue but I note you have said that it's not really worth the paper it's printed on anyway.

I'd also want to know why they decided to remove the bays and how the work was carried out. 

The property used to be sheltered accommodation for young adults in difficulty so I would imagine that the reason the bays were removed was for safety rather than anything else - all the current windows are locked with minimum opening capability which also suggests it was the safety of the occupants. Every room is currently a bedroom apart from the kitchen and a lounge. structurally the survey came back with nothing to be concerned about other than light maintenance and some dampness in the cellar which was to be expected as it's below ground.

Also bear in mind that the current arrangements (e.g. the 'low risk and wardens') could change in future without you having any say or comeback. E.g. ask yourself whether you would still buy if, say, you knew the wardens were being removed due to budget cuts.

That is something to consider but the street has a number of smaller properties being renovated on it all of which are worth 100k more than the one we are buying plus as it's in a conservation area which I would wager that the area is being gentrified rather than going down. This isn't a house we will rent or look to flip in the near future so we are willing to take the risk. If the whole area was on the way down I'd be more concerned. We stayed in the street over a weekend and there was some disturbance on the Saturday night because of the football I think, but nothing worse than we experience where we currently live.

We have requested the procedure to notify the wardens of anything that happens outside of their hours which we couldn't do if we had a private residence with a nightmare neighbour.

All great points and thanks for coming back so fast!