Buyers solicitors refusing indemnity policy

delirious

MaiTai said:

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?

When I spoke to the estate agents today, even they couldn’t understand why the solicitor wouldn’t accept an indemnity policy. They said they would speak to the buyer and see where the issue lies but we’ve had to make the decision that if it all falls through, we are ok with that, otherwise we could end up getting pushed into agreeing to all sorts. 

As I say though, what I couldn’t work out is why the buyers solicitor was asking us if we wanted to withdraw. Just seemed odd to me. 

It definitely feels like the solicitor is influencing things to me which is why I thought it’d be a good idea for the estate agents to talk to them. 

They’re not FTB but I think this may only be their second house purchase. 

MaiTai

Sounds like they are somehow trying to save face with their clients by having you withdraw from the sale.Its very odd behaviour!

Are they dealing with an online conveyancing factory or a bricks & mortar local solicitor?

delirious

MaiTai said:

Sounds like they are somehow trying to save face with their clients by having you withdraw from the sale.Its very odd behaviour!

Are they dealing with an online conveyancing factory or a bricks & mortar local solicitor?

No, it’s a local conveyancer but yes you’re probably right. 

White_rose

I hope you get this sorted and progressed. 

I bought a house last year that the survey indicated about the doors being removed and the same issue with building regs. My seller paid for an indemnity (something like £60!) and I went ahead with the purchase. 

I have just ordered the doors to go back on, which pains me as the open plan kitchen I love. However I don’t have a solid roof and the kitchen is a freezer in the winter and an oven with any hint of the sun. 

Good luck! 

delirious

White_rose said:

I hope you get this sorted and progressed. 

I bought a house last year that the survey indicated about the doors being removed and the same issue with building regs. My seller paid for an indemnity (something like £60!) and I went ahead with the purchase. 

I have just ordered the doors to go back on, which pains me as the open plan kitchen I love. However I don’t have a solid roof and the kitchen is a freezer in the winter and an oven with any hint of the sun. 

Good luck! 

Thanks. I really do hope the solicitor was just trying to call my bluff but ultimately the buyers can’t afford for it to take months to get building regs approval so if they genuinely have an issue with it, the best thing for them is absolutely to find another house and we will be mature enough to wish them all the best. Let’s hope it doesn’t come to that though. 

Splatfoot

user1977 said:

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. 

Unfortunately some lenders do. 

scottie21

Following this as we are in a similar situation with our sale, but yet to have queries raised etc from solicitors so not sure how it’s going to go. 

Fingers crossed it all gets straightened out for you. 

Section62

delirious 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. 

Most buyers don't have an issue because they don't understand how structures work nor the requirements of building regs.  They also subscribe to the "it won't happen to me" theory, and the false belief that if it hasn't already fallen down it is 'safe'.

The lender looks at it purely from the monetary perspective - that if the building contains a serious structural defect or has a partial collapse it will become unsaleable, and they won't get their money back if the buyer hands over the keys.

The solicitor puts themselves at risk if they fail to advise either the buyer or lender to exercise extreme caution and adopt an approach suitable for the situation.

Indemnity policies don't stop structures failing. They are virtually useless where the problem is structural works being carried out without the right sign off. They also usually won't pay the rebuilding cost, or bring people back to life.


Looking at it from the solicitor's/buyer's perspective, you had structural work carried out on the house without knowing it needed BR approval.  The people advising you about the work also told you BR approval was not required.  It is fair to say they either lacked competence or were being deceitful.

How much confidence would you have in assurances about structural integrity given by people (you and the builder) who (at the time) were apparently unaware of the very basic and fundamental requirement to get BR approval?  A builder with sufficient competence to do structural work will know that BR signoff is required.

If you and your builder didn't know about this, then how could you possibly know whether or not the alterations were being done safely?  (not criticising you, just pointing out why a diligent solicitor could be justified in raising concerns and not placing too much weight on the assurances given.)


With regard to the garage conversion, are you sure planning consent wasn't required?  How did you verify this?

Section62

delirious said:

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. 

I wouldn't read too much into that.

The solicitor may regard the detail as confidential, or at least not a detail which needs to be shared.

It is also a legal thing to use language like "we", "us", "our" and "client" to refer generally to the side they are representing, not necessarily in the common usage way the words are used to refer to specific individuals or organisations.

delirious

Section62 said:

delirious 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. 

Most buyers don't have an issue because they don't understand how structures work nor the requirements of building regs.  They also subscribe to the "it won't happen to me" theory, and the false belief that if it hasn't already fallen down it is 'safe'.

The lender looks at it purely from the monetary perspective - that if the building contains a serious structural defect or has a partial collapse it will become unsaleable, and they won't get their money back if the buyer hands over the keys.

The solicitor puts themselves at risk if they fail to advise either the buyer or lender to exercise extreme caution and adopt an approach suitable for the situation.

Indemnity policies don't stop structures failing. They are virtually useless where the problem is structural works being carried out without the right sign off. They also usually won't pay the rebuilding cost, or bring people back to life.


Looking at it from the solicitor's/buyer's perspective, you had structural work carried out on the house without knowing it needed BR approval.  The people advising you about the work also told you BR approval was not required.  It is fair to say they either lacked competence or were being deceitful.

How much confidence would you have in assurances about structural integrity given by people (you and the builder) who (at the time) were apparently unaware of the very basic and fundamental requirement to get BR approval?  A builder with sufficient competence to do structural work will know that BR signoff is required.

If you and your builder didn't know about this, then how could you possibly know whether or not the alterations were being done safely?  (not criticising you, just pointing out why a diligent solicitor could be justified in raising concerns and not placing too much weight on the assurances given.)


With regard to the garage conversion, are you sure planning consent wasn't required?  How did you verify this?

I completely get where you are coming from. The builder was a friend but we have lost touch since the work was done. We took his word for the fact that building regs wasn't needed as he was a friend. Whether he was just trying to avoid the hassle of building regs to get the job done and get paid, I don't know but I did witness him putting the steel work in, and while I know that just because there's been no movement yet doesn't mean it's done correctly, I would have thought if there was an issue, it would have had at least some movement in the past 7 years.

As of yet we have not had any further news from our solicitor or the estate agents so I will be chasing them again this afternoon and will update the thread.