No build over agreement?

xJoJox_3

Hi,

We’re in the process of buying a house and it has come up that an extension was built over a public sewer in 2016.

Our solicitor has asked for the build over agreement but the sellers solicitor seems to be refusing to provide it stating it is covered by the building regs sign off (which seems to have been gained retrospectively) 

Our solicitor has asked for an indemnity which I understand would cover costs if  the water company later needed to access the sewer. 

I’m just wondering what other risks we should consider, assuming they agree to the indemnity. I’m a little concerned that the condition of the sewer probably hasn’t been checked and perhaps could cause an issue in future. 

Any advice would be appreciated, thanks! 

ss2020jd

This is a common issue and came up when we were selling even though our extension was built before 2011, when the water authorities took over responsibility to repair and maintain the majority of sewers that ran through the boundaries of private properties.

As I understand it, it is to protect you in the unlikely case the water authority ever needs to access the sewer. They will have responsibility to put back any damage caused in doing so and the insurance should cover that cost.

We were advised the quickest way was to pay for indemnity insurance, which we did. I think retrospective agreements can be costly and take a long time and there is a risk involved in alerting the water authority to work which they may not agree to. You may not be able to get indemnity insurance if that is the case. 

If you really wanted to you could request a CCTV investigation of the sewer to assess the condition but again it could be costly and the sellers probably would be unlikely to agree. 

xJoJox_3

Thank you, I think the indemnity seems the easiest option. 

Is there a convention as to who pays for this or is it up for negotiation. I guess this might also depend how much it costs!

housebuyer143

ss2020jd said:

This is a common issue and came up when we were selling even though our extension was built before 2011, when the water authorities took over responsibility to repair and maintain the majority of sewers that ran through the boundaries of private properties.

As I understand it, it is to protect you in the unlikely case the water authority ever needs to access the sewer. They will have responsibility to put back any damage caused in doing so and the insurance should cover that cost.

We were advised the quickest way was to pay for indemnity insurance, which we did. I think retrospective agreements can be costly and take a long time and there is a risk involved in alerting the water authority to work which they may not agree to. You may not be able to get indemnity insurance if that is the case. 

If you really wanted to you could request a CCTV investigation of the sewer to assess the condition but again it could be costly and the sellers probably would be unlikely to agree. 

There is no requirement to get a build over agreement if the sewers were private when they were built over, as in pre 2011.
The water companies adopted the pipes as they were on that date. 

Solicitors will ask for an indemnity policy but they are not required as legally a build over agreement was not and isn't needed. 

Sold mine recently with the same issue and I explained it wasn't needed and they agreed. Saved some money on an indemnity there.

xJoJox_3

Thanks housebuyer, this one was built in 2016 so I assume that means it will be needed?

housebuyer143

xJoJox_3 said:

Thanks housebuyer, this one was built in 2016 so I assume that means it will be needed?

Yes, unless they are private still.

ss2020jd

housebuyer143 said:

ss2020jd said:

This is a common issue and came up when we were selling even though our extension was built before 2011, when the water authorities took over responsibility to repair and maintain the majority of sewers that ran through the boundaries of private properties.

As I understand it, it is to protect you in the unlikely case the water authority ever needs to access the sewer. They will have responsibility to put back any damage caused in doing so and the insurance should cover that cost.

We were advised the quickest way was to pay for indemnity insurance, which we did. I think retrospective agreements can be costly and take a long time and there is a risk involved in alerting the water authority to work which they may not agree to. You may not be able to get indemnity insurance if that is the case. 

If you really wanted to you could request a CCTV investigation of the sewer to assess the condition but again it could be costly and the sellers probably would be unlikely to agree. 

There is no requirement to get a build over agreement if the sewers were private when they were built over, as in pre 2011.
The water companies adopted the pipes as they were on that date. 

Solicitors will ask for an indemnity policy but they are not required as legally a build over agreement was not and isn't needed. 

Sold mine recently with the same issue and I explained it wasn't needed and they agreed. Saved some money on an indemnity there.

That was a bit of luck. We did explain this to our buyer’s solicitor but they wouldn’t accept it. As it was the last thing before exchange we just agreed to get to exchange.

 

ss2020jd

xJoJox_3 said:

Thank you, I think the indemnity seems the easiest option. 

Is there a convention as to who pays for this or is it up for negotiation. I guess this might also depend how much it costs!

I understand as the responsibility is on the seller, who should have the agreement, it’s them who pay. 

It was in our case (even though we didn’t strictly need it we weren’t going to let it scupper the sale).
 Some people argue it protects the buyer so they could offer to split it. It isn’t too expensive but some policies might go on the percentage of the value of the property.  

In this climate, if it gets things to exchange it’s worth doing.

xJoJox_3

Thanks! We’ll see what Monday brings 🤞🏻

Tiglet2

The build over indemnity policy cost will be based on the purchase price of the property - typically they cost in the region of £300 and it would normally be the seller who pays, but can be negotiated if it was a deal breaker.