Indemnity insurance in lieu of building regs cert

NervyBuyer

Quick question on one aspect of this - if you have indemnity insurance in lieu of building regs sign off for a bedroom in a loft conversion, can the property be marketed with that counted as a bedroom? i.e. marketed as a 2-bed but there is only 1 bedroom excluding the loft.

I think the answer is no, as the insurance is purely about protecting against enforcement costs, nothing to do with the habitability/safety of the space.

Thanks!

stuart45

As you expect, indemnity insurance doesn't mean the work is up to standard.
It still needs signing off to be marketed as a bedroom.

eddddy

NervyBuyer said:

Quick question on one aspect of this - if you have indemnity insurance in lieu of building regs sign off for a bedroom in a loft conversion, can the property be marketed with that counted as a bedroom? i.e. marketed as a 2-bed but there is only 1 bedroom excluding the loft.

I think the answer is no, as the insurance is purely about protecting against enforcement costs, nothing to do with the habitability/safety of the space.

Assuming you mean the property will be marketed by an estate agent (and not you)...

If an estate agent gives a misleading description of the house, it's them who are breaking the law - not you.  So it's really up to them to decide what they are happy to say to stay within the law.


So when you get estate agents in to do a marketing appraisal, explain that the loft room has no building regs approval -  and ask how they would describe the house in their sales details. Maybe...

• One bedroom plus Attic Room
• One Bedroom with potential for 2nd bedroom, subject to necessary approvals 

The estate agent has to follow the Consumer Protection for Unfair Trading Regulations (CPRs) - which means they cannot mislead potential buyers.

The Property Ombudsman has decided that calling a loft conversion a bedroom - when it doesn't have relevant planning and building regs approval - is misleading.

Here's what the Property Ombudsman has said following a complaint from a buyer in a similar case:

The agent needed to demonstrate that they had conducted reasonable precautions and due diligence. As it was obvious the loft space was being used as bedrooms, as a minimum, the agent should have sought documentary evidence from the vendor, confirming that the works had been approved and signed off by the local authority.

Furthermore, the agent should have sought to confirm with the local authority that there was nothing outstanding with regard to the loft conversion and have written records recording all of the above.

If evidence could not be found to suggest that the conversion was compliant, the agent would have been expected to describe the two bedrooms in the loft space as a ‘loft space’ or ‘attic room’ and should not have been included in the number of bedrooms in the property particulars.

There was no evidence to suggest that the agent conducted any further checks.

link: https://thenegotiator.co.uk/features/misleading-information-on-access-and-attic-bedrooms/

NervyBuyer

Thanks, that's very helpful detail. I am the buyer, through an estate agent. (although a potential future vendor of course). There is more to come on this, I just wanted to establish that aspect first.

eddddy

NervyBuyer said:

if you have indemnity insurance in lieu of building regs sign off for a bedroom in a loft conversion, can the property be marketed with that counted as a bedroom? i.e. marketed as a 2-bed but there is only 1 bedroom excluding the loft.

I've just read your previous posts - and I'm wondering if you've left out some key information in this thread, which completely changes the situation.

• Your previous posts suggest that the seller is currently converting a house with 1 bedroom plus loft room into a 2 bedroom house (with appropriate building regs approvals).

• So you will be buying a legitimate 2 bedroom house, with building regs approval

• In that case, it's completely legitimate to advertise it as a 2 bedroom house

Just like a builder might advertise a 4 bedroom house - even though, as of today, it's just a muddy field. (They don't have to advertise it as "Muddy Field for sale".)

Albermarle

eddddy said:

NervyBuyer said:

Quick question on one aspect of this - if you have indemnity insurance in lieu of building regs sign off for a bedroom in a loft conversion, can the property be marketed with that counted as a bedroom? i.e. marketed as a 2-bed but there is only 1 bedroom excluding the loft.

I think the answer is no, as the insurance is purely about protecting against enforcement costs, nothing to do with the habitability/safety of the space.

Assuming you mean the property will be marketed by an estate agent (and not you)...

If an estate agent gives a misleading description of the house, it's them who are breaking the law - not you.  So it's really up to them to decide what they are happy to say to stay within the law.


So when you get estate agents in to do a marketing appraisal, explain that the loft room has no building regs approval -  and ask how they would describe the house in their sales details. Maybe...

• One bedroom plus Attic Room
• One Bedroom with potential for 2nd bedroom, subject to necessary approvals 

The estate agent has to follow the Consumer Protection for Unfair Trading Regulations (CPRs) - which means they cannot mislead potential buyers.

The Property Ombudsman has decided that calling a loft conversion a bedroom - when it doesn't have relevant planning and building regs approval - is misleading.

Here's what the Property Ombudsman has said following a complaint from a buyer in a similar case:

The agent needed to demonstrate that they had conducted reasonable precautions and due diligence. As it was obvious the loft space was being used as bedrooms, as a minimum, the agent should have sought documentary evidence from the vendor, confirming that the works had been approved and signed off by the local authority.

Furthermore, the agent should have sought to confirm with the local authority that there was nothing outstanding with regard to the loft conversion and have written records recording all of the above.

If evidence could not be found to suggest that the conversion was compliant, the agent would have been expected to describe the two bedrooms in the loft space as a ‘loft space’ or ‘attic room’ and should not have been included in the number of bedrooms in the property particulars.

There was no evidence to suggest that the agent conducted any further checks.

link: https://thenegotiator.co.uk/features/misleading-information-on-access-and-attic-bedrooms/

The recent experience of  a family member, is that having offered on a 3 bedroom house with  a bedroom in the loft, they asked the EA if they were sure the loft room had all the right paperwork etc. The EA just looked at them blankly, and he was the senior one in the office.
Clearly he had not checked and did not seem even aware of any potential issues.

NervyBuyer

eddddy said:

NervyBuyer said:

if you have indemnity insurance in lieu of building regs sign off for a bedroom in a loft conversion, can the property be marketed with that counted as a bedroom? i.e. marketed as a 2-bed but there is only 1 bedroom excluding the loft.

I've just read your previous posts - and I'm wondering if you've left out some key information in this thread, which completely changes the situation.

• Your previous posts suggest that the seller is currently converting a house with 1 bedroom plus loft room into a 2 bedroom house (with appropriate building regs approvals).

• So you will be buying a legitimate 2 bedroom house, with building regs approval

Unfortunately no, hence 'in lieu of ' in the title. That's what I was told at the time of viewing/offer. I've now been told they aren't applying for regularisatiion, here's an indemnity policy instead. My question was regarding future marketing in the light of that change, not what was marketed to me.

I'm awaiting further details and expect to need another thread checking on my options when I've got the full picture, so won't waste anyone's time further here.

FreeBear

NervyBuyer said:

eddddy said:

NervyBuyer said:

if you have indemnity insurance in lieu of building regs sign off for a bedroom in a loft conversion, can the property be marketed with that counted as a bedroom? i.e. marketed as a 2-bed but there is only 1 bedroom excluding the loft.

I've just read your previous posts - and I'm wondering if you've left out some key information in this thread, which completely changes the situation.

• Your previous posts suggest that the seller is currently converting a house with 1 bedroom plus loft room into a 2 bedroom house (with appropriate building regs approvals).

• So you will be buying a legitimate 2 bedroom house, with building regs approval

Unfortunately no, hence 'in lieu of ' in the title. That's what I was told at the time of viewing/offer. I've now been told they aren't applying for regularisatiion, here's an indemnity policy instead. My question was regarding future marketing in the light of that change, not what was marketed to me.

As of October 2023, any work substantially completed after this date, the council has up to 10 years to serve any enforcement notices for planning and building regs breaches. This is a big increase over previous time limits, and it will affect how much indemnity insurance will cost going forward.

Your seller is being a right plonker if he thinks he can shift the liability on to you for the sake of saving a few hundred in Building Control fees - It begs the question, what else has he skimped on if he can't be bothered to get the work signed off.

Bigphil1474

When did the loft get converted? I think Regularisation is limited to the last 40 years, so anything older can't be regularised. I asked a mate who works in BC last year about it, and as far as I can remember he said it's usually easier to go for a new sign off than regularisation, but will be difficult in any case for them to see if a loft conversion is structurally sound after it has been completed - they need to see the gubbings not the final fit. Words to that effect.

[In our case, we were looking at a 3 bed house that had a fourth 'loft room', but had also had a single storey extension and neither had sign off. He basically said walk away.]

Poppy90

Following with interest as my buyer has just dropped out (after 5 months ) due to not having building regs on my loft conversion (was done in 1983). 

Wasn’t an issue when I brought it just was advised to have indemnity insurance… 

marketed as a 2 bedroom and was sold to me as a 2 bedroom 

Section62

Bigphil1474 said:

When did the loft get converted? I think Regularisation is limited to the last 40 years, so anything older can't be regularised....

The current building control system stems from the Building Act 1984 - although other controls on building work existed before then.  Regularisation can't predate the coming into force of the Act because the required powers have ceased to exist.