Insurance Indemnity Policies - Are they Really Necessary?

Leodogger

We have sold our property and now just before Exchange of Contracts the Buyer is chasing us for Indemnity Insurance to cover Windows and Patio Doors we had installed a few years ago because we were not issued with a Fensa Certificate which I can quite understand, but now the Solicitor advises us that the Garage we had Built some 8 yrs ago should have been granted permission by the original builder of the Bungalow before being built.   My question is why?   We own the property freehold and we were never advised by the builder who built the garage, who told us we didn't need planning/building permission because it was identical to the next door neighbour's garage which was obviously built when the bungalows were originally built, but obviously the people who bought our bungalow from new didn't want a garage!    Is it enforceable to make us take out an insurance indemnity policy to cover this garage ?

Hoenir

Buyer is borrowing the money. Lender will wish to protect themselves against any possible future reduction in the property value. It's their money at risk. With time being expensive. Quickest and cheapest option is to have an indemnity policy. 

Leodogger

The Buyer is trading down to a smaller property so probably is not using a lender in my opinion, so is this still enforceable and should I challenge the solicitor re the cost of one?   In fact, what could happen if there were no indemnity policy purchased?

user1977

Leodogger said:

now the Solicitor advises us that the Garage we had Built some 8 yrs ago should have been granted permission by the original builder of the Bungalow before being built. My question is why?

Presumably because there are covenants (title conditions) obliging you to get consent. Haven't you asked your solicitor, if they haven't bothered explaining it to you already?

Leodogger

All she said to me was that we should have got permission from the original builder!   End of !   She said it was normal practice if you build a garage yet I had never heard of such a thing.  Seems to me that buying the freehold gives you no more freedoms than if you were to buy a leasehold property !

lincroft1710

No-one can force you to take out an indemnity policy other than a buyer saying they won't buy the bungalow unless you do so


There is a 99.999% certainty a council won't take action over windows and doors and slightly less certainty re the garage. 

user1977

Leodogger said:

All she said to me was that we should have got permission from the original builder!   End of !   She said it was normal practice if you build a garage yet I had never heard of such a thing.  Seems to me that buying the freehold gives you no more freedoms than if you were to buy a leasehold property !

Well, you've heard of it now, and you ought to have heard of it at least at the time you bought, as your solicitor should have reported to you on the title.

mebu60

How much are we talking about here for an indemnity policy? If it's under three figures is it worth getting stressed out about in the overall context of the costs of moving house? 

Mutton_Geoff

I'm convinced these policies will become the subject of a future mis-selling scandal.

Leodogger

Well it is never JUST the price of the policy is it because the solicitor adds on their charge for obtaining the policy and then there is VAT on that and so it goes on.   She has already told us the charge without this garage policy will be £170 and presumably that is before she adds on her admin charge !🙄  How much it will be for the garage is anyone's guess !

TheSpectator

What is boils down to is do you want the sale to go through or not?