Seller refusing to pay for indemnity policy

saajan_12

You can argue either way who's responsibility it should be (as posters are above) - its the seller's responsibility as they're selling a property with a potential issue, or its the buyer's responsibility for having an over cautious lender who's making a big deal over an unlikely enforcement. 

Bottom line it doesn't matter - at this stage its a negotiation. Would you walk away if the seller increased the price by £260? Would the seller walk away if you reduced the offer by £260? Drop the principles and just find a middle ground. 

HouseMartin567

OP, I had similar whereby the seller hadn’t sought permission from the original house builder for an extension, thereby going against the house covenants - although in my case it was the seller themselves that had carried out the extension. 

It got into a bit of a stalemate where the EA said the seller would pull out rather than pay for an indemnity. Quite frankly I was fed up with the whole purchasing scenario by that point and didn’t care if it fell through so I called their bluff and said I would pull out if they didn’t pay for it. Long story short, they paid for the indemnity. My actions might have seemed drastic but it was a ‘straw that broke the camel’s back’ scenario.

Saying that, if you aren’t fussed and it isn’t a lender requirement, then just tell your solicitor that you understand the risk but you are instructing them to proceed without the indemnity.

stuart45

Indemnity policies are often required by lenders for lack of Building regs. It's because there is no time limit if taken to the High Court, so although in most cases it's highly unlikely, it's still a theoretical possibility.
Who pays is really down to who is the most desperate for the sale. 

Slinky

How about going 50/50 just for the sake of getting it done?

user1977

stuart45 said:

Indemnity policies are often required by lenders for lack of Building regs. It's because there is no time limit if taken to the High Court, so although in most cases it's highly unlikely, it's still a theoretical possibility.

There's also the inherent issue with undocumented works that you don't usually have much evidence of when they were done, so although you might have been told works were about 15 years old, you might become unstuck if it later turns out they were only 2 years old.

lincroft1710

If the council are aware that there has been a garage conversion since the extension to it has received full PP and BR, then surely an indemnity policy is pointless?

EssexHebridean

It not being your property yet is irrelevant - the policy won't be obtained until completion in any event. If you don't complete, then you won't be paying for the policy.

If you want the house enough, I'd say £260 isn't worth arguing about. Ask yourself whether it's worth losing the property over. If the answer is yes, then re-think whether you should be buying it at all. 

Chief_of_Staffy

It's for your benefit, so you pay it. I don't know where the idea originally came from that the seller should pay to mitigate risk for the buyer, in anything other than extraordinary circumstances, but it seems quite popular these days. If I buy a car from you I don't expect you to take out mechanical insurance for me in the event it breaks down. I refused the second such suggestion from my buyer this morning (about the house, not the car) and anticipate doing so at least once more before this charade is over.

"Dear Mr. Chief, your buyer's solicitor says she is worried about [insert trivial and outrageously unlikely outcome here] and wants you to pay to put her mind fully at ease."

Dream on.

Tabieth

It’s only £260 and, presumably, isn’t worth risking the purchase. I’d just pay it. 

wittykitty24

Slinky said:

How about going 50/50 just for the sake of getting it done?

We have requested this through the estate agent  to see if we can come to some agreement. Seems like from the majority we will probably end up paying it. 

However I’m thinking the indemnity policy we have offered to pay for the sale of our house I’m now tempted to ask our buyer to pay for as we thought this usually does come from the seller. But as people have mentioned we are not gaining anything from this (ours is for access to our drive at the back of the house where you have to use an unadopted lane to get to which we do everyday currently which is crazy 🙄) and as we are paying our policies on both our house and the one we’re purchasing it now doesn’t seem fair.