indemnity policy...please clarify...

[rushour]

hi, i've read thro some of the past threads about this, however, I think I may be in quite a unique position, but would like fellow mumsnetters to clarify:

We are in the process of buying a house. We should be exchanging soon, however our solicitor is requesting the vendor's to take out indemnity insurance for 10yrs to cover the extension to the kitchen and back lounge room that they didn't do (previous owners before they moved in).
I just wanted to know whether this is normal? Our vendor solicitors have said they have every right to argue this, but vendor is keen to exchange as soon as, and doesn't want anything to hold it back.

But don't you think 10 years cover is enough? What happens after the 10years cover? I assume we continue to take it out. We are also now aware that when we come to sell our property we will have to do the same.

We've never had a time limit placed on ours afaik, they seem open ended. It should cover, for example, retrospective enforcement by planning /buildings regs depts and perhaps there is a time limit within which they can do so. We've had to buy one both tiems we've sold (flawed leasea dn non FENSA windows) and split the cost of one on current house (room in loft)

Hi lizs, that's interesting. Thanks and I'll query it with my solicitors tomorrow. We suggested they take the cost off the house price, however our solicitors are adamant that the vendor takes out the policy and we don't go for that option of reducing the price. Are my solicitors just being awkward?

tbh it is only likely to be a couple of hundred pounds . Hardly worth rewriting the contracts for (to adjust price) and to get new mortgage offer) and in the scheme of things proabbly not worth losing time and possibly the purchase over unless it is a huge risk. If vendor says no offer to go 50:50. It is also a benefit to you as you sell it on with the house.

We are selling our house atm, and we have to take out a indemnity insurance for our buyers, we had a new consumer unit fitted and didn't realise we needed a building regulations certificate and never recieved one, the electrician must not have been registered to be self employed so we were stuck (electrician no is now unavailable )

Anyway the indemnity insurance is something like £20 one off payment not sure how long it is covered for though.

I doubt the sellers of your house would cover the extension for longer, 10 years is prob what you would get in term of a guarantee anyway.

We were in a similar position with some building work that the owners previous to us had done, but didn't bother getting the final building certifiacte (when we bought neither our solicitors or surveyor picked it up!). Our buyers solicitor took out the policy and we paid them the £200. The sale price remained the same but on completion our solicitor gave us £200 less and gave them the cheque. I don't think it matters who takes it out - it's the work that's covered so is irrelavent whose name is on the policy I'd have thought.

thanks for your responses. The vendors have agreed to take out the indemnity insurance for 10yrs. Hopefully we are exchanging next fri! (fingers crossed)

I think the time limit to pursue you for having an extension without planning/building regs is about 4 years

Or is it to cover problems with workmanship? In that case, when you buy a new house you get 10 years warranty, so I think 10 years sounds very reasonable.

Check what the indemnity covers.

This situation is completely normal. If your vendors are willing to take out the indemnity, take it.