Indemnity insurance for lack of building regulations

nadire · 26 February at 11:13AM

Hi all, I'm new to this forum but would appreciate any advice on whether it's worth getting an indemnity insurance for lack of building regulations: we are in the process of buying a house which has a pretty large side and rear single-storey extension - it was erected in 2004, whereas our seller bought this house in 2007, so it was done by the previous owner. It looks that planning permission was obtained for this extension, but no building regulations.

Our solicitor said as building regulations were not necessarily required until 2013, it is perfectly normal to just get an indeminity insurance, which is now a standard practice for missing building regulations. She said think about the extension works conducted before 1985 - there won't even be a chance of obtaining regularisation certificate (cos currently local authorities would only consider application for regularisation for works conducted after 1985), but people still buy those houses.

However, I have heard that many people are reluctant to buy houses without building regulations because obviously indeminity insurance would only cover the cost of defending enforcement action, NOT defective works and general maintenance and repairs. To be fair, our level-3 survey didn't raise any concerns about the extension, so technically speaking there shouldn't be any safety concerns, but I have seen from some forums that lack of building regulations would still be a significant off-putting factor in the future when we want to sell this house.

Interestingly, as we would like to do loft conversion after we move in, we have talked to our builder about this, but as soon as we told him the existing extension has no building regulations, he immediately advised us to walk away and said he would change his mind about taking the loft conversion job. He didn't say why, but this did make us even more hesitant about buying this house.

This issue has made me so anxious that I've been insomniac for days. We do love this house but we certainly don't want to end up having troubles reselling it in the future. If anyone has had similar experience or is willing to share their views about this, I would be very grateful to hear. Many thanks!

Section62 · 26 February at 11:42AM

nadire said:

Hi all, I'm new to this forum but would appreciate any advice on whether it's worth getting an indemnity insurance for lack of building regulations: we are in the process of buying a house which has a pretty large side and rear single-storey extension - it was erected in 2004, whereas our seller bought this house in 2007, so it was done by the previous owner. It looks that planning permission was obtained for this extension, but no building regulations.

Our solicitor said as building regulations were not necessarily required until 2013, it is perfectly normal to just get an indeminity insurance, which is now a standard practice for missing building regulations. She said think about the extension works conducted before 1985 - there won't even be a chance of obtaining regularisation certificate (cos currently local authorities would only consider application for regularisation for works conducted after 1985), but people still buy those houses.
...

In your position I'd seriously consider changing solicitor, as if that is really what they said then this one doesn't know what they are talking about.

Not only were there building regulations requirements long before 2013, the logic of getting indemnity insurance in that situation doesn't make sense - if (assuming they were right, which they aren't) it wasn't necessary to get BR signoff when building an extension before 2013 then it would be pointless having an indemnity policy as it wouldn't be possible for the council to take enforcement action against something which wasn't needed in the first place.

They are correct about the difficulty in obtaining regularisation for very old work, but they are adopting a very odd approach pointing that out, but then suggesting an indemnity policy for work done in 2004. The odds of enforcement action for work done that long ago is likely to be close to zero, unless there was something clearly unsafe.

Interestingly, as we would like to do loft conversion after we move in, we have talked to our builder about this, but as soon as we told him the existing extension has no building regulations, he immediately advised us to walk away and said he would change his mind about taking the loft conversion job. He didn't say why, but this did make us even more hesitant about buying this house.

This issue has made me so anxious that I've been insomniac for days. We do love this house but we certainly don't want to end up having troubles reselling it in the future. If anyone has had similar experience or is willing to share their views about this, I would be very grateful to hear. Many thanks!

I think there are two issues there.

1) A condition of these indemnity policies is normally not to contact the council. But clearly to do a loft conversion you'll need contact with the council (or a private BC company) to get BR signoff for the new work. That may void the indemnity policy for the extension. But that probably isn't what the builder is concerned about.

2) If work has been done which might compromise the structural stability of the property then the builder would be taking on a risk that the work they do might cause structural failure, or involve more work (and cost) to stabilise the parts of the structure someone else has compromised. Without knowing more about the original extension and how that relates to the loft conversion it is hard to say whether the builder is being reasonable in their approach... but the 'hard to say' part is probably reason enough for someone with plenty of other work to do to keep well away from a project which could become a problem. You might find another builder who was happy enough to take on the project, especially if the extension had no impact on parts of the structure that would be affected by the loft conversion work.

nadire · 26 February at 12:50PM

Section62 said:

nadire said:

Hi all, I'm new to this forum but would appreciate any advice on whether it's worth getting an indemnity insurance for lack of building regulations: we are in the process of buying a house which has a pretty large side and rear single-storey extension - it was erected in 2004, whereas our seller bought this house in 2007, so it was done by the previous owner. It looks that planning permission was obtained for this extension, but no building regulations.

Our solicitor said as building regulations were not necessarily required until 2013, it is perfectly normal to just get an indeminity insurance, which is now a standard practice for missing building regulations. She said think about the extension works conducted before 1985 - there won't even be a chance of obtaining regularisation certificate (cos currently local authorities would only consider application for regularisation for works conducted after 1985), but people still buy those houses.
...
In your position I'd seriously consider changing solicitor, as if that is really what they said then this one doesn't know what they are talking about.

Not only were there building regulations requirements long before 2013, the logic of getting indemnity insurance in that situation doesn't make sense - if (assuming they were right, which they aren't) it wasn't necessary to get BR signoff when building an extension before 2013 then it would be pointless having an indemnity policy as it wouldn't be possible for the council to take enforcement action against something which wasn't needed in the first place.

They are correct about the difficulty in obtaining regularisation for very old work, but they are adopting a very odd approach pointing that out, but then suggesting an indemnity policy for work done in 2004. The odds of enforcement action for work done that long ago is likely to be close to zero, unless there was something clearly unsafe.

Interestingly, as we would like to do loft conversion after we move in, we have talked to our builder about this, but as soon as we told him the existing extension has no building regulations, he immediately advised us to walk away and said he would change his mind about taking the loft conversion job. He didn't say why, but this did make us even more hesitant about buying this house.

This issue has made me so anxious that I've been insomniac for days. We do love this house but we certainly don't want to end up having troubles reselling it in the future. If anyone has had similar experience or is willing to share their views about this, I would be very grateful to hear. Many thanks!
I think there are two issues there.

1) A condition of these indemnity policies is normally not to contact the council. But clearly to do a loft conversion you'll need contact with the council (or a private BC company) to get BR signoff for the new work. That may void the indemnity policy for the extension. But that probably isn't what the builder is concerned about.

2) If work has been done which might compromise the structural stability of the property then the builder would be taking on a risk that the work they do might cause structural failure, or involve more work (and cost) to stabilise the parts of the structure someone else has compromised. Without knowing more about the original extension and how that relates to the loft conversion it is hard to say whether the builder is being reasonable in their approach... but the 'hard to say' part is probably reason enough for someone with plenty of other work to do to keep well away from a project which could become a problem. You might find another builder who was happy enough to take on the project, especially if the extension had no impact on parts of the structure that would be affected by the loft conversion work.

Thank you so much for sharing your views! Yes, I do find the solicitor's advice a bit weird, though I do wonder what would have happened when it comes buying a house with extensions done decades ago cos it sounds that buying indemnity insurance would be the only solution...

Your thoughts about where the builder might have come from are reallly helpful indeed! It does remind me of the fact that apart from the loft, we were also thinking about having the existing side extension further converted, and considering what you said, that would probably put off the builder even more!