Who pays for indemnities

Ramouth

We are in the process of buying a house.  There were a number of indemnity policies put in place when it last sold just over a year ago.  These need to be increased to reflect the increase in value of the property between sales.  

Our solicitor says that the vendor refuses to pay for this but in the same email warns us that we might need to pay to increase them when we come to sell in the future (as we did with our sale).  Is it usually the sellers responsibility?  

From our point of view, it is the seller benefitting from the increase in price so they should pay.  Curious what have others agreed to?

user1977

Usually a seller's responsibility. What are they for and do you actually need them all anyway? 

ss2020jd

As sellers we paid indemnity for a lack over build-over agreement, which wasn’t needed at the time when we did our side extension, but the buyer’s solicitor flagged it as one of the last things before exchange so we just agreed to pay it to avoid delay. I believe they paid for some other indemnity relating to searches so that they could meet the deadline they wanted. 

RedFraggle

The buyer is the only person to benefit so I'm of the opinion it's their responsibility.
I have however paid as a vendor to be nice.

AdrianC

I very much doubt the indemnities do need to be "upgraded" after only a year, if ever.

What are they actually covering?
Are they actually necessary at all?
Is your lender insisting on them?

As far as who pays, it's whoever agrees to pay. The buyer is the one who wants them, after all.

Ramouth

Thanks for the replies.  The existing policies are for Unknown Rights (unmade lane to rear access has no owner) and for Building regulation indemnity for previously completed extension.

In addition there is a requirement for a Conservation Area Consent because windows were replaced without planning consent.  This was before the current owners tenure but it wasn’t picked up by their solicitor when the bought.

We wouldn’t bother with them personally but are told they are required to satisfy our mortgage company.

The price increased by around 20% in 15months or so as they bought in the post brexit slump and sold this spring when things were going a bit crazy.

Ramouth

Interesting that some people think buyer should pay because they are the ones benefitting.  

When I was selling I paid for a BR one because it was my fault it was needed (I hadn’t sought approval for a small roof we had recovered).  We also paid for an uplift on the one for the power cables running across the front of the house because the house had increased in value.  We thought this fair as we had benefitted from the increase.

user1977

RedFraggle said:

The buyer is the only person to benefit so I'm of the opinion it's their responsibility.
I have however paid as a vendor to be nice.

The general expectation is that you're selling something marketable, so e.g. it's got good title and necessary consents. If you've benefited from not bothering to sort out a wonky title or get permission for alterations, it's usually considered reasonable that you fill the gap by getting the insurance. But all up for negotiation, especially if e.g. the alterations are historic and there's virtually no chance of enforcement taking place.

Ramouth

Update - sellers agreed to pay all indemnities and we have exchanged!

Drawingaline

Brilliant! We have always paid for indemnities. In my eyes why quibble and jepodise a sale/purchase of hundreds of thousands over a few hundred. 

ss2020jd

Congratulations @Ramouth - excellent news! 

That’s how I saw it too @Drawingaline. There are enough hurdles and delays as it is.