Do I have recourse with builders if it was done before I bought the house?

[ThisMustBeMyDream]

I've had an unfortunate situation today. I have been told by the water company that the foul water drain is connected to the surface water drain. They have specifically told me it is from the extension being built and the drainage moved as a result. The extension was built 3 years ago. I bought the house 2 years ago.
As the house owner I am now responsible. I can be fined up to 50k and face imprisonment if I do not put this right. It's around 3k at least to correct.
I am in contact with previous owners. They have told me who the builder was. Company seems reputable and lots of good reviews.
What should my first steps be? Should the building company rectify this issue?
Not sure what other information is needed. Happy to answer questions.

May be of relevance. There are no building control sign off for the extension as it was done without the owners realising they needed planning. It has an indemnity policy for when we purchased.

Unfortunately you are going to find it difficult to find a legal route for recourse. The builder will absolutely be liable from what you say but that liability is contractual and you aren’t a party to the contract so can’t sue on it. The previous owners can sue but they aren’t the ones who will have suffered the loss so can’t recover it for you (outside a slow and complex route) and I doubt they’d agree to do so anyway. Other routes like negligence are still likely to fall at similar hurdles since they won’t owe a future purchaser a duty of care.

The indemnity is a red herring as it will only cover cost related to enforcement not loss flowing from things that might have been picked up that weren’t. If the indemnity is for lack of planning then it won’t cover building regs unless it explicitly states it will either.

So unfortunately I think the costs fall to you but there is no reason not to engage with the building company and see what they say - there may be scope for a good will something if they are large and have a reputation to keep.

But you dont or didnt have a contract with them, sure there may be some legal expert that knows different but I have no idea how you would be able to do anything about it

As others have said you have no contract with the builders so at best you could appeal to their better nature but you would have no legal recourse. If anything if you had a survey done before buying the house you could see if it’s something that should have been picked up the ,

If it was a part of the extension build, can you clain on the indemnity policy?

You have no title to sue the Builder
I am astonished you bought a house with a 3 year old extension with no local authority consents
Were the risks of this explained to you by your solicitor
Title indemnity totally useless here
You could speak to the Builder,nothing to lose I suppose,but given they did not get sign off on the build they hardly sound reputable

The indemnity policy does not normally help you in this situation. They provide very limited cover. Check the paperwork to see if your solicitor explained this.

Your best bet is to keep the sellers on side with you and ask for their help with contacting the builders and with saying they will also post a review if the builder won't rectify the problem. Hopefully if the builder is large and the reviews are genuine it will be worth them rectifying the problem for you even though they will realise that you can't sue them.

I would try and get a few quotes in case you can't get the original builder to make good - but would you want them back given their quality of work?

I suspect the issue you will have is that many reputable companies won't want to touch the work of another firm without a high quote so I would try and get a few quotes.

If you had not bought the house the sellers would have been in the same mess as you as although they could have sued the builder as they had a contractual relationship , they probably would not have wanted the stress or risk of not recovering legal fees to try and reclaim the £3,000.

I wrote an email to the building company asking them to rectify. They responded positively and accepted the issue. They are coming out this week to inspect and make a plan for the work.
I spoke to the company owner when arranging for them to come out and he was very apologetic. Such a relief!

I don’t agree with this (I am a litigation lawyer).. Liability can arise in negligence as well as contractually. To establish a claim in negligence you need to show that the builder owed you (as a future owner of the property) a duty of care, that duty was breached, and as a result the loss has crystallised (or will) in the form
of the fine and rectification costs.

The duty of care point is the one which will be challenged, but it is obvious to me that any owner of the house (not just the owners who contracted with the builder) would face an issue if the water pipes were wrongly connected. There is an established body of case law on establishing a duty of care owed to third parties. I’d definitely have a punt, especially since the builder should have insurance which will respond to such a claim.

Except that D&F Estates v Church Commissioners (House of Lords case) makes it clear there is no duty of care to a future purchaser in a case of defective works where the loss is pure economic loss. Unless there is evidence to suggest the builders otherwise assumed such a general duty of care in this case then, no, there is no scope in negligence.

There’s an equally long line of case law on the “special relationship” under which a defendant can be found liable for pure economic loss. If this were my house, I’d definitely send a letter of claim to the builder on this, asking them to notify their insurer. The OP may or may not be successful but it’s definitely worth a go. That is, if the builder doesn’t come and fix the issue for free (which it appears may happen).

Legal position seems a bit unclear
Given the amount of money involved I don’t think I would recommend litigation

Sure, but Hedley Byrne predates D&F and D&F explicitly considered and excluded the idea that there was such a Hedley Byrne special relationship such that builders were liable for economic loss from defective works. Hedley Byrne isn’t an escape hatch where there’s a clear line of case law directly applicable on these facts. Of course, there could be something we are unaware of that means the builder assumed liability here and that there was reliance, proximity etc although I can’t see what that could be based on what we know.

Anyway, luckily for everyone it looks moot if they’re going to do the morally right thing and put it right!

i would still investigate whether or not the facts allow for an arguable case based on a special relationship for PEL - contract terms, representations made at the time, etc. There is also the question of whether or not Building Control signed off the work (which is required), and the possibility of a claim under the Defective Premises Act 1972, which expressly imposes a duty on anyone conducting work on a dwelling to conduct the work in workmanlike manner, with that duty being owed to the person who commissions the work and to subsequent people who acquire an interest in the dwelling.

The defect must be such as to render the dwelling uninhabitable, which means not literally “cannot enter” but unfit for habitation. Wrongly connected water pipes could easily meet that threshold.

Also, the limitation period for a claim under the DPA is quite long (either 15 or 30 years depending on when the work was done). .

Of course, it’s good lawyering to ask those questions but the sorts of facts that might establish a special relationship are vanishingly unlikely to arise in a bog standard domestic builder relationship with a previous owner. Building regs just goes to negligence and doesn’t help on the duty of care point (Murphy v Brentwood, also House of Lords). The DPA point is probably the most interesting one but “unfit for habitation” under s1 generally requires the defect renders the property actually unfit not just potentially unfit and that’s as at the point work is completed. There’s no suggestion it’s actually causing any sewage issues and Illegality / lack of reg compliance in and of itself doesn’t meet s1. Although there is narrow scope for a potential issue to render a property uninhabitable per s1, the reason for not draining foul water into surface water drains is fundamentally an environmental health issue rather than something likely to cause issues with the plumbing in the property, as I understand it, hence the fine etc. So I don’t agree it would easily meet the s1 threshold.

Don’t get me wrong, I’d write a letter to the builder referencing all these things but if I received that letter on behalf of the builder I’d happily tell the builder their position was pretty rock solid.

Ps. Thanks for a bit of a legal debate, I’m enjoying it, although I don’t know what it says that I enjoy a good legal debate outside of working hours as well as within 🤣

We can have a debate about this (likewise I enjoy a good debate) but across all the possible points to take my view remains that there are decent arguments to run here for negotiation purposes and that’s what I’d do if it were my house. Especially since the contractor will have insurance.

This is more common than you'd think, and it's worth pursuing. I'm an architect and I disagree with some comment here on liability, which I will come to shortly.
First step: check whether the extension had building control sign-off. If it did, the drainage should have been inspected and approved. If it was signed off despite being incorrectly connected, that raises questions about the inspection. Contact your local authority building control and ask to see the completion certificate and inspection records.
Second: the builder may have liability under the Limitation Act, which gives you six years from completion for claims relating to defective work. The extension is three years old, so you're within that window. The fact you're not the original client complicates things, but doesn't necessarily shut the door. The defective work was done to the property, not just for the previous owner.
Third: contact the builder directly, calmly, with the water company's findings. A reputable company with good reviews may well fix this voluntarily rather than risk their reputation. Put everything in writing.
It's also worth checking whether the previous owners' conveyancing solicitor should have flagged this, and whether your own surveyor missed it. There may be more than one route to recovering the cost.
Don't panic about the fine. The water company wants it fixed, not prosecuted. Act promptly and keep records of everything.