Buyers solicitors refusing indemnity policy

Waunakee

Experienced a similar situation albeit a few years ago now as the prospective purchasers of a property with load bearing walls removed along with the chimney breasts.
The work had been carried out several years earlier with no building control sign off.

Whilst we were happy to continue with the purchase we were informed that our lender would not proceed without regularisation and they would not accept indemnity insurance in this case.The vendor declined invasive investigations and retrospective regularisation.

I guess we could have asked our broker to search for an alternative lender but instead offered and completed on a less problematic property.

delirious

Thanks for all the comments. I have spoken to our estate agents just now and they are going to speak to the buyers to see if the buyers are the ones with the problem or whether it’s the solicitors with the issue and see if they can find a solution. They did say the buyers can override the solicitor but the buyers would presumably only do so if they were 100% comfortable. 

We have looked at the possibility of putting french doors in place (which would be a huge shame) but the opening is just shy of 2 meters whereas french doors are typically up to 1.7m wide and would need something extra to fill the space so not sure that would work.

EDIT: to say that our solicitor has just replied to say that if we were to install doors, the buyers solicitor would likely want the same certificate as the doors have previously been removed. 

delirious

Doozergirl said:

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.  

As you say, regardless of the steelwork we would likely not get building regs for the actual conservatory anyway. 

It’s a real shame because the buyers have said the one thing they like is how open the kitchen/conservatory is, so it seems like it was a selling point for them. 

Our solicitor has twice advised us that (not in so many words) it’s not a good idea to try and get the regularisation certificate because we would then bot be able to get an indemnity in the future. 

Doozergirl

delirious said:

Thanks for all the comments. I have spoken to our estate agents just now and they are going to speak to the buyers to see if the buyers are the ones with the problem or whether it’s the solicitors with the issue and see if they can find a solution. They did say the buyers can override the solicitor but the buyers would presumably only do so if they were 100% comfortable. 

We have looked at the possibility of putting french doors in place (which would be a huge shame) but the opening is just shy of 2 meters whereas french doors are typically up to 1.7m wide and would need something extra to fill the space so not sure that would work.

EDIT: to say that our solicitor has just replied to say that if we were to install doors, the buyers solicitor would likely want the same certificate as the doors have previously been removed. 

You can easily make french doors fit, either by having made to measure doors or by altering the opening.  That isn't an issue. 

It should really be an external
quality door, so you should be looking at uPVC anyway, which is almost always made to measure.  

You can get sign off on those replacement doors, so that's your issue solved.  Don't talk about any previous work, just 'replacement doors'. 

delirious

Doozergirl said:

delirious said:

Thanks for all the comments. I have spoken to our estate agents just now and they are going to speak to the buyers to see if the buyers are the ones with the problem or whether it’s the solicitors with the issue and see if they can find a solution. They did say the buyers can override the solicitor but the buyers would presumably only do so if they were 100% comfortable. 

We have looked at the possibility of putting french doors in place (which would be a huge shame) but the opening is just shy of 2 meters whereas french doors are typically up to 1.7m wide and would need something extra to fill the space so not sure that would work.

EDIT: to say that our solicitor has just replied to say that if we were to install doors, the buyers solicitor would likely want the same certificate as the doors have previously been removed. 

You can easily make french doors fit, either by having made to measure doors or by altering the opening.  That isn't an issue. 

It should really be an external
quality door, so you should be looking at uPVC anyway, which is almost always made to measure.  

You can get sign off on those replacement doors, so that's your issue solved.  Don't talk about any previous work, just 'replacement doors'. 

What I meant was that our solicitor said that the buyers solicitor will likely still want the regularisation certificate for the wall being opened up even if we put doors in, so it wouldn’t resolve things to this solicitors satisfaction. 

We have decided to stick to our guns as we feel the buyers solicitor is being unreasonable. We are in a strong position as there is nothing comparable on the market in our area, the nearest similar house is 5 miles away (and the buyers wanted our specific area), and listed at “offers in excess of” £30k over what we accepted. The buyers are also 13 weeks into the sale on their house so their buyers will be pushing them to move.

At the end of the day, it will disrupt the buyers more than it will us if they pull out, and should the pull out we can likely get a higher price as prices have moved up since we accepted our offer. 

maisie_cat

Our estate agent told us that virtually all sales have an indemnity for something now.
We were asked to pay for an indemnity for works done in 1978, there was planning but the buyers solicitors believed the front elevation was wrong.
We told the buyers that if they needed it they could pay for it and they did, my suspicion was that the solicitors have a vested interest in selling indemnity policies.
If it is the mortgage company at the behest of the solicitor, and the buyers are getting a good deal they could easily decide to pay for it themselves.

delirious

maisie_cat said:

Our estate agent told us that virtually all sales have an indemnity for something now.
We were asked to pay for an indemnity for works done in 1978, there was planning but the buyers solicitors believed the front elevation was wrong.
We told the buyers that if they needed it they could pay for it and they did, my suspicion was that the solicitors have a vested interest in selling indemnity policies.
If it is the mortgage company at the behest of the solicitor, and the buyers are getting a good deal they could easily decide to pay for it themselves.

I don’t have a problem paying for an indemnity and have offered one several times but their solicitor keeps rejecting. 

What I don’t understand is why the buyers solicitor asked if we wanted to pull out rather than advising his clients to pull out. 

MaiTai

How sure are you that it is the buyers solicitor causing the issue?

They also represent the lender and are duty bound to inform them of the lack of building regulations sign off.

Whilst it’s pretty much considered the norm for lenders to accept indemnity insurance it is not always the case and in certain instances they will insist on regularisation.

Without knowing the exact circumstances difficult to comment further but it is an issue that occurs from time to time where the lender seemingly deems it high risk 

delirious

MaiTai said:

How sure are you that it is the buyers solicitor causing the issue?

They also represent the lender and are duty bound to inform them of the lack of building regulations sign off.

Whilst it’s pretty much considered the norm for lenders to accept indemnity insurance it is not always the case and in certain instances they will insist on regularisation.

Without knowing the exact circumstances difficult to comment further but it is an issue that occurs from time to time where the lender seemingly deems it high risk 

Of course you’re right but even in your suggested scenario, the solicitor will be advising the lender. If the lender was the issue, I would have thought the solicitor would say the lender won’t accept xyz, but that’s not what they’ve said. 

Of course, it could well be the lender but from conversations we’ve had when the buyers viewed last week, it doesn’t seem to be the buyers with the issue. 

MaiTai

Something just doesn’t sit right with the information you are being given from the other side but I can’t quite put my finger on it.

Assuming the mortgage provider is happy to lend and your buyer still wishes to proceed I can’t see the problem.

The solicitor in these circumstances can only advise on the risks of continuing with the transaction but whilst they should be acting in the clients best interests it is ultimately the clients decision whether to proceed or not.

Sounds very much as though the tail is wagging the dog!

Are your purchasers FTB by any chance?