Buyers solicitors refusing indemnity policy

delirious

When we bought our house, we had a fair bit of work done, including new kitchen, solid roof on the conservatory and the wall between the kitchen and conservatory opened up. We were told at the time that we didn't need building regulations approval and we now know this to have been incorrect advice.

Now, we have come to sell the house, and 5 weeks into the sale, the buyers solicitor has brought up the lack of building regulations. They also keep referring to lack of planning permission for the garage conversion, but that was done by previous owners and to my knowledge doesn't require planning permission.

We have offered the buyers an indemnity policy at our expense to cover the lack of building regulations, but their solicitor has refused. They are pushing for a regularisation certificate which we simply do not have the money to pay for as it's not only the cost of the application itself but also the expense of opening up where the steel work is and then having it all patched up and re-plastered/re-decorated afterwards. I've also read that these can take up to 8 weeks under 'normal' circumstances so goodness knows what it's likely to be at present which could then jeopardise the sale anyway.

We are not in a hurry to sell as we're not in a chain, and there's nothing on the market in our area now at anywhere near our agreed sale price (the cheapest similar house is now £30k more), so we've decided to decline the buyers solicitors request even though that may lose us our buyers but I just wondered what everyone else's thoughts are.

verytired11

How long ago did you have the works done? I think if over 2 years building regs can't be enforced.  I am sure someone in here will know the time limit. If you are over the time limit then buyers can just get their surveyor to check that everything is sound. I agree not to get building regs done now - what a hassle 

delirious

The work was completed over 7 years ago and there’s not been any movement whatsoever since it was completed. 

I can understand if the buyers are concerned but we’ve offered a photo we took of the steel going in, and the buyers have been round to look themselves. It just seems the actual solicitors have the issue rather than the buyers. 

Slithery

verytired11 said:

If you are over the time limit then buyers can just get their surveyor to check that everything is sound.

If the purchaser was paying cash then you'd be correct. However, if there is a mortgage involved then the solicitor is also working for the lender. It appears as if the lender won't agree to the mortgage without regularisation so I'd guess that the sale is off and new buyers using a different solicitor will need to be found.

delirious

Slithery said:

verytired11 said:

If you are over the time limit then buyers can just get their surveyor to check that everything is sound.

If the purchaser was paying cash then you'd be correct. However, if there is a mortgage involved then the solicitor is also working for the lender. It appears as if the lender won't agree to the mortgage without regularisation so I'd guess that the sale is off and new buyers using a different solicitor will need to be found.

Hopefully that’s not the case, or that the buyers want the house enough to look at another mortgage 😬

user1977

Slithery said:

verytired11 said:

If you are over the time limit then buyers can just get their surveyor to check that everything is sound.

If the purchaser was paying cash then you'd be correct. However, if there is a mortgage involved then the solicitor is also working for the lender. It appears as if the lender won't agree to the mortgage without regularisation so I'd guess that the sale is off and new buyers using a different solicitor will need to be found.

I strongly suspect the lender doesn't care about any of this (beyond whatever advice the solicitor gives them). I would be calling their bluff. 

delirious

Just to update the thread, we replied to our solicitor yesterday declining the request to apply for a regularisation certificate but reiterated our offer of an indemnity policy. The buyers solicitor replied to our solicitor this morning to say that they would only accept the regularisation certificate and have asked therefore if we are wanting to withdraw from the sale.

My gut is telling me that the buyers solicitor wants us to withdraw from the sale so that they can tell the buyers we pulled out (as obviously they can't pull out for the buyers without their say so). We have declined once again to go down the route of a regularisation certificate and have also refused to withdraw from the sale saying that if the buyers wish to withdraw from their purchase that is a decision they need to make.

I'm aware that the buyers are in a chain whereas we are not, so it will have significantly more impact on the buyers than it will have on us.

JCarmello

Do not tell them that you are pulling out.
Your solicitor should make it clear that you will offer indemnity, but the works are 7 years old, and you are not going through the time and expense of the regularisation. If they withdraw, they withdraw.

I would also reach out to the EA sale's progressor to make sure they are aware of the situation, and that the buyer is as well. It could be that the buyer is unaware that what their solicitor is asking for would add 2 months to their purchase. That in itself could threaten their sale.

eddddy

Do you have a 'good' estate agent who is progressing the sale?

This is the type of problem a 'good' estate agent should be helping to smooth out. 

Firstly, the EA should have a chat with the buyers to see if this really is a significant problem in their eyes. And if it is a problem, maybe suggest they get a survey, and give the surveyor your photo of the beam; and explain that the enforcement period has passed.


Or if it isn't a problem in the buyer's eyes, the EA can suggest they contact their solicitor and instruct them to proceed (with indemnity insurance, if required by their lender).

pinkteapot

JCarmello said:

I would also reach out to the EA sale's progressor to make sure they are aware of the situation, and that the buyer is as well. It could be that the buyer is unaware that what their solicitor is asking for would add 2 months to their purchase. That in itself could threaten their sale.

Exactly what I was going to suggest. EA can have a natter with the buyers and try to work out if it's them or their solicitor/lender who's blocking on this. It may be the buyers themselves, even if they seemed fine on viewings. 

Buyers can 'order' their solicitors to proceed against their advice, provided the lender is happy. 

Doozergirl

Opening up houses to a conservatory is a sticky point.  Arguably, you cannot get sign off for it because a conservatory was built outside of regulations.   You are opening up your house to an outbuilding when the requirement is for doors between house and conservatory.  You're lucky if you can get it regularised via a SAP calculation that proves the heat loss isn't excessive.  

I'd tread carefully here as you may end up in the same position again.  Our own buyers lost two sales very late in the day for exactly the same thing.   Why they didn't
put doors back in the first time, I have no idea.  They ended up putting them in after the second collapse.