Buyer went to council so can no longer have an indemnity

eddddy

1978john_2 said:

We are selling an inherited property. The buyer has gone to the council so can no longer get an indemnity. We think they may pull out of the purchase now. If we get a new buyer, will they be ok to get indemnity even if previous buyer went to the council? I’m hoping this makes sense. 

Based on what you say, it sounds like 'Contaminated Land Indemnity Insurance'.

The potential risk being that the brickworks allowed chemicals (e.g. fuel oil) to leak into the soil, and those chemicals could cause harm to people and/or get into water courses.

In those circumstances, the council could serve a "Remediation Notice" that orders the property owner to clear the contamination.

If a Remedial Notice is served, the Indemnity Insurance should cover the cost of clearing the contamination.


I'm no expert on this, but Indemnity Insurance policies (including Contaminated Land policies) generally say something like this:



When it says "You must not discuss contaminated land or matters covered by the policy with any person, company or organisation including the enforcing authority", I guess "You" means the policyholder - so either the seller or buyer.

So you and the actual buyer can't discuss this with the council - but it doesn't sound like there's a problem if a previous potential buyer discusses it with the council.

But like I say, I'm no expert on this. 

EssexHebridean

When you apply for an indemnity insurance policy, you are asked to agree to a series of statements. One of those statements is invariably confirming that you are not aware of anything that would have “alerted” the relevant authority to any issues which the policy might be covering. In this situation there has been such an alert and so it’s unlikely that indemnity insurance will be an option. Sorry OP - I appreciate that’s really not what you want to hear. 

@eddddy I suspect the issue is that the buyer DOES know about it - so when a future buyer asks about indemnity policies, it’s not going to be possible for the seller’s solicitor to arrange the policy, and they cannot push the buyer’s solicitors to do it as they already have knowledge that such a policy may well not pay out if push came to shove. It’s a bit of an ethical corner, if you like. 

chanz4

Titus_Wadd said:

I wonder how many claims in real life are ever made against these house-buying-type indemnity policies? 

very little hence the sols love them