House purchase - no completion certificates for extension/renovation

[Bellendejour]

Hello all!

I’m posting for a friend who is having some major last minute house purchase stress. In a nutshell:

With one week to go until we are supposed to move in we’ve just found out that the sellers never applied for completion certificates for the house extension which kind of means the planning permission isn’t really valid. They’ve offered to get us some kind of indemnity insurance but it doesn’t feel enough as what would happen if we decided to sell?! Going to try and see if they’ll lower the price.

The solicitor has been quite shit. And they’ve changed the whole house around including an extension up and to the side and changed the kitchen to the bathroom (or something like that). They’ve applied for building warrants for all of the work but only have 1 completion certificate when there should be 4…

Does anyone have any advice on what they should do, what they need to get the (shit) solicitor to do, what the indemnity needs to cover, how much money off to ask for, any other screaming issues with all of the above?

Thanks so much for any help, obviously all very stressful at this stage!

Update: the property is in Scotland in case that affects things 🏴󠁧󠁢󠁳󠁣󠁴󠁿

I’d just walk away. My house doesn’t have building regs for a wall that was taken down. The previous owners put a beam up when they took a walk down but don’t get building regs.

I got a survey which said it wasn’t a supporting wall and hadn’t needed a beam and the work which had been there for years was off a really good standard. So I went ahead with the sale.. no chance I’d do that with an extension or anything that gives the house value

Unless that still have time to apply for them in retrospect. But I wouldn’t exchange until I had them

How long ago was the work done?

Walk away.

If the deposit you put down wasn’t a lot then I’d back out. They seem shoddy sellers to me and like their hiding something. I wouldn’t like it

Sounds like a nightmare

The indemnity insurance effectively covers the risk, as long as the policy is rigorous I'd proceed if I liked the house. Can a surveyor not come and give it the all clear and confirm it is purely a paperwork oversight?

@Bellendejour

If it’s a week until the move in date have you concluded missives ?

Your solicitor should have been well on top of this sort of thing a long time ago. Not with a week to go.

I’m assuming they had planning permission for the works and they just didn’t get the completion certificates once they finished it all ? In this case then an indemnity policy can be used until they obtain the certificates.

I'd walk away if it were me.

We bought then sold a house that was similar. Two extensions neither of which had certificates of completion.

We paid for indemnity insurance and it wasn’t an issue.

I would pull out if you can. And report the solicitor.

Honestly this is so so common. Obviously you do what you feel comfortable with but as a solicitor who deals with house sales and purchases all day, I don't bat an eyelid at this.

How old is the extension? Did the sellers do the extension or were they too just not given the paperwork when they bought?

as what would happen if we decided to sell?!

You'd give indemnity insurance to the buyer same as has been suggested here. Providing it wasn't erected a few months ago this really isn't a huge issue (generally speaking obviously what you choose to accept is up to you) in conveyancing.

And don't tell the council, not you, your solicitor or the seller. It will invalidate the indemnity insurance.

Indemnity only covers you against the council taking action against the works. It won't cover you if the works have been done to a substandard level.

I've had policies for small scale works but this sounds like they have done major changes - no way would I be happy with a policy. I'd be insisting they get the completion certificates.

If the extension has created extra living accommodation ie a bedroom and it's unauthorised then you aren't buying a 4 bed house, but a 3 bed one (for example). It may also affect the valuation and your mortgage lender should also be informed.

Surely this should have been in the home pack that the vendor pays for?

As it’s Scotland can your friend still pull out as I thought once a date was set that was it.

Also who on earth extends their house and spends money on remodelling once they’ve sold.

@FeckingPuddleDuck

Honestly this is so so common. Obviously you do what you feel comfortable with but as a solicitor who deals with house sales and purchases all day, I don't bat an eyelid at this.

How old is the extension? Did the sellers do the extension or were they too just not given the paperwork when they bought?

as what would happen if we decided to sell?!

You'd give indemnity insurance to the buyer same as has been suggested here. Providing it wasn't erected a few months ago this really isn't a huge issue (generally speaking obviously what you choose to accept is up to you) in conveyancing.

You seem quite relaxed about this, but won't it cause difficulty with the lender?

And what if it transpires the work was unsafe?

OP, I wouldn't be too hasty to withdraw from the purchase. Suggest you find out how long it would take to get the completion certificates. Possible the work is all fine, but just needs to be signed off

@Singlebutmarried

Also who on earth extends their house and spends money on remodelling once they’ve sold.

I don't think OP is suggesting this has happened at all. I am assuming it is works that were done some time ago but completion certificates were never sought.

Indemnity insurance only cover you for the council taking action not for if the work is shoddy. Has anyone informed your lender yet? We had this with our current house. They had converted the basement and put the kitchen down there. No sign off at all. They did get the council to try to give them retrospective certificates and the council confirmed that it wouldn't pass (it was really poorly done) Our solicitor had to inform our lender who done valued the house significantly as they said they considered the house to have no kitchen. Meaning we had to up our deposit (but still massively reduce our offer) and now we are in the process of moving the kitchen back upstairs. My point is, your lender may well determine the outcome. Unless you're a cash buyer?

Not a chance in hell I would complete without the work actually being signed off unless it was done a really long time ago (and hasn’t fallen down yet….) - we sold recently and had to wait for the council to issue completion certificates which had been delayed by COVID, and they were a nightmare to get, and required a lot of remedial changes to actually get the sign off, in spite of the fact our builders were pretty good! You’d run the risk of inheriting non-compliant (and potentially unsafe) work.

I would insist that they get planning permission in retrospect or else I'd pull out. It usually takes around 6-8 weeks to get planning permission though.

Just get the seller to pay for indemnity insurance and it will be fine

(Also this should have come up WELL before now, I’d be having some serious words with your solicitor…)

Have they concluded the missives? If that has been done (like exchange of contracts in England), they may not be able to just pull out.

This happened to the vendors when we moved into our house - they had concluded the missives with us, but had some real legal issues with the house they were going to move into. On moving day they had no option but to move out and let us in, but had to go into rental as their purchase had fallen through.

They need to hassle their solicitor to be more on the ball.