WWYD - dream house with illegal annex

[hanahsaunt]

Offer accepted on dream house - ticks every box with bells on not least because at the bottom of the garden the double garage has been converted to a 2 storey annex with large bedroom upstairs and living area/kitchen and bathroom downstairs (1/3 of original downstairs still has the garage doors and is used as storage space). This was the icing on the cake - we have a lot of visitors - every weekend for months on end is not uncommon - and the ability to accomodate family groups without relocating all of my (4) dc would be a joy.

But ... the conversion didn't go through building regs and hasn't been signed off. For an unspecified reason the vendor won't apply for regularisation - I think because she is worried there may be legal ramifications for her as she has been using it as a v successful B&B for the last few years. She has given us the following options (bearing in mind she needs to move at beg of Sept for work, we are chain free and can move any time and the market is slow):

1. She rips out the conversion and restores to as it was when built i.e. downstairs double garage and upstairs playroom so the stairs would be intact but we would lose the v beautiful bathroom and the ability to put people up easily.

2. Apply for regularisation and get works needed costed and then negotiate apt price reduction for the works to be done after completion.

3. Go for it as is but our solicitor has said if we do that she will refer back to our mortgage co to check that they are still happy to lend on that basis - we have been through the mill to get our mortgage so reluctant to rock the mortgage boat.

The vendor is quite a scary lady and though she is clearly completely in the wrong I fear she may just put the house back on the market (though equally she needs the sale to move on).

So ... WWYD? I think we'll have to settle for option 1 and if so how much would you look to reduce the price by if losing a bedroom and a bathroom from what you thought you were buying?

i would go for 2 i think...

can you speak to anyone who could tell you whether or not it's likely to be signed off (or whatever happens)?

Regularisation costs so that might be why vendor doesn't want to do it.

Ask your solicitor about indemnity insurance. The vendor should pay.

We were in a similar situation several years ago having purchased a house with an extension that didn't have building regs. this wasn't picked up when we bought it but was when we sold it. We paid about £80 for indemnity insurance.

indemnity insurance is the way to go! Plus was it not signed off by building regs (should be easy enough to sort if expensive) or planning permission (oh dear...).

YY to MoonHare - it sounds like you need indemnity insurance. Ask you solicitor about it.

But be aware - if you go to the council regarding building regs you have in effect notified them of the structure and then you can't get indemnity insurance.

yup option 4) insurance. vendor to pay.

do NOT speak to the council or anyone else about it in the meantime as that will mean insurance is not available.

When was the work done?
If it was before 1985 you cannot apply for regularisation.
If this is the case it's up to you how you proceed. You could just accept that it doesn't have building regulations but I would assess the work and work out whether it would pass if you could apply for your own piece of mind.
Questions to ask - is it structurally safe?
Is it insulated? Is it fire safe? Are the electrics safe? Is the drainage ok? Is the glazing appropriate for it's location (safety glass if needed) - heating safe? Properly ventilated?
If minor remedial works could be taken to rectify anything that doesn't come up to scratch I would get it rectified by the vendor (or at least a negotiation on the price)

Another vote for the insurance here too.
Regularisation would probably mean that it would need to be ripped out as even if it met Regs at the time, it probably will not meet the current ones.
When you come to sell you will probably need to pay for the same insurance for your buyer, so it all equals out AND you get a crash pad for your friends.
Happy days.

The annex did not get passed by building regs (council not asked). Vendor has offered indemnity insurance. Our solicitor has advised the following:

This insurance would only pay for any legal action/costs if the Council came and found out that the property was being used without building regulation approval. It would not cover the cost of remedial works to put the property into a state whereby building regulation approval would be granted, presupposing that consent would be given.

You take the risk, accept the insurance, get the Council out, obtain quotes for the works and remedy any defects there may be at your own cost (presupposing the Council say the building would pass Building Regulation approval).

If you take the final option I will have to refer the matter to your lender to advise them of the situation to confirm that they are happy to lend.

Rock and a hard place! So essentially it would seem that if we take the insurance we would have to not inform the council and hope no one told ... not sure I want to live with that level of uncertainty. It would also invalidate our buildings/contents insurance and if anything happened to anyone in the annex then we could be horribly liable ...

Or does someone know different about indemnity insurance???

It was built in 2003 and converted in 2009.

Bump.

You don't have to get the council out for building regs - you can get a private firm. Or you could get a builder to have a look - a good builder will know what needs to be done - and they could price up the necessary work, you could then get that taken off the price, get the work done, get building regs done. Personally, I wouldn't lose a dream house for it. It can be sorted. Probably not at huge expense if it was built properly in the first place...

What about planning permission? This will have been change of use wont it? In which case Planning Permission will have been required (very limited knowledge admittedly). Was even the playroom over the top part of the original building. I would bet my bottom dollar that this was not designed to be a two strorey dwelling.

Following on from WonkyLegs' post this could be a very sub-standard conversion. Remember the original building structure was not for what is there now.

My DH is an electrician:- was this properly supplied for a residence or is it just a spur off a house circuit? Is it earthed properly? If it is a separate dwelling with its own incoming metal pipes it will need to be properly earthed.

I would be prepared to offer the vendor a price based on the fact that she has the main house with a potential building wreck at the bottom of the garden which will need major expense to put right.

This annexe could be potentially very dangerous and totally uninsurable.

A builder cannot self-certify (I sont think) and a good builder will not want to take on someone else's work when he hasnt seen it built.

An electrician can inspect but shouldnt certify other people's work. An inspection will only have limited scope.

Sorry, posting in pieces as DH dispenses pearls of wisdom

DH can self-certify as an electrician but even that involves notifying the council. The cloak of invisibility which has shrouded this annexe is slipping.

Dont forget that the world and its dog now know about this annexe (solicitors, estate agents, neighbours). Currently it is a liability not an asset.

Do you have access to the original plans and pp? Get an architect/builder to look over them and see if they would meet Buildings Regs or what would need doing. If you involve the council Indemnity Insurance is no longer an option and you are taking your chances as to the costs of any remedial works required. What did the lender's survey say about it , the mortgage offer should based on the valuation with the annex being a garage (assuming that had pp) . Given that you and your solictor are aware fo this the mortgage company should be informed whatever the outcome otherwise you could be in breech of the t and c. Why won't the vendor apply for retrospective permissions although that might take a few months? If you were to pull out then she would face the same issue with next prospective purchaser

The thing is ... the council does know about the annex and has granted permission for it to be used as a bed and breakfast ...

No, I wasn't saying a builder could certify, but they could point out deficiencies, and cost out the necessary work...

One department knowing isn't enough for it to be disclosed generally. Planning and Buidlings Regs for example are separate departments. The onus to inform is on the owner. Bet she hasnlt been paying council tax on the additional accommodation or even perhaps Income Tax on her earnings. Personally I don't think I'd take the risk of buying wthout knowing the full situation.

She may be scary but I think I can safely not cast aspersions as to her taxes! She runs several terribly successful business locally and is moving to centralise them all into one location, namely the local pub (another reason to maintain good relations ). She (and her then husband) built the house which is still under NHBC warranty so as for planning etc it would all seem to be above board other than the conversion of the annex ...

Having re-checked your OP I think I assumed that you were not going to pay full whack for the annex building. Can you clarify the pricing situation? What are other similar properties without an annex going for?

Similar properties have gone for either £50k more because they come with land (as in several acres) or £50k less because they have one fewer bedroom and a bit smaller all round. It's a collection of one offs rather than anything v standard.

I would say possibly a structural engineer would need to inspect (at vendor's expense) plus an inspection by a qualified electrician.

The problem is though that it could be completely safe but without PP then it could still have to be knocked down.

Would you get the same mortgage deal on 50k less valuation ? Your solicitor is ethically and probably legally obliged to tell the lender of this issue. Sorry but think that in itself may throw a spanner in the works regardless of your options as to whether and how to proceed with the purchase.