If your solicitors want vendor to take out indemnity, do you give in and pay it to keep chain moving?

[CrapBag]

There is a discrepancy with the extension on the house we are buying. The vendors solicitors said it is the same footprint as previous building but my solicitors said it breeches something because the roof is higher than the previous building and the windows are different. He wants the vendor to take out indemnity insurance.

I have spoken to the EA who says that vendors solicitor doesn't agree with mine about this breech and they haven't answered my solicitors question on it. He had no idea they have said this until I spoke to him just now, he has even chased them up but had no reply. This is the last bloody point to sort out now then we are ready to exchange. My solicitor I right btw, the roof is a very different height to the previous building and the windows are all different too so he is correct with the breech.

He did say either they agree to pay the indemnity or we may have to to keep things moving. I admit I am keen to keep things moving as we want to complete at the end of this month but at the same time the survey flagged up quite a lot of things that we are going to have to pay out for so in another way I do not want to fork out for something else. We are already goings halves on the woodworm treatment that they can't afford to get done but they are willing to move out earlier so this can be sorted. They are trying to be accommodating where they can.

I think we ended paying the indemnity in the end - the vendors had windows replaced without the right building regs or something. It was only £25.

That price would be good but I'm sure the EAs said £100 which is a pain at this point.

we were prepared to pay for indemnity for a minor issue but it turned out to cost 40£ and the vendor was happy to pay that.

I think the whole indemnities thing is an utter scam. Our solicitor insisted we buy one because they couldn't find the permissions for the (30 year old) extensions. The vendor refused to buy it, so we had to. I can say with absolute certainty that it was £100 thrown to the wind.

We refused to pay for various indemnities for our buyers, it was really utter bollocks stuff like chimney breasts removed without building regs, it was done years and years ago. How old is the extension? Realistically what's going to happen?

Generally speaking it should be the seller who pays for indemnity policies. If the buyer were to drop out etc, then the seller still has the indemnity policy to pass on to a future buyer. A buyer with an indemnity policy for a house they don't eventually own is a waste of money. However, I wouldn't let a small cost like this threaten the chain to the point of collapse, so you may have to "take a view" on it as to whether to pay or not. It's all about paperwork as far as the solicitors are concerned - they will ask for paperwork for everything and if it is not available, indemnity policies are requested. Obviously it would be the seller who has paperwork on their own house, therefore it is the seller who should buy the indemnity policy, but I agree that for very old extensions/alterations, it sometimes seems daft to expect paperwork to have survived through various ownerships.

Morally the seller should pay for imdemnities, as it is their house which is 'faulty' in whatever way, and the issues are not ones that the purhcaser could have forseen when they made their offer, so the seller should morally pay for imdemnities to make good the house and thus honor the buyer's purchaser price.

However, there's no right/wrong in housebuying, it's all down to brinkmanship and who will blink first. We've paid for them when buying in the past, other times the seller has paid for them. It's all part of the bargaining game, i.e., 'we will pay for them on the condition you leave a full tank of oil', or 'if you pay for it, we guarentee completion within 2 weeks etc'.

The point of an indemnity is to insure you against enforcement action etc though. I don't think it's a moral thing at all! If your buyer, as ours did, requests a policy because of a dropped kerb on a whole street of dropped kerbs that have been there for many many years, it's perfectly fine to say- the council are not going to require the reinstatement of these kerbs, in fact they probably did the work in the first place, your solicitor is being pernickety and we're not going to buy it.

I'm sure the sellers of pointless indemnities do rather well for themselves. Policies tend to be cheap because risk is often minimal.

Well, we had to take out one for our buyer. Something to do with the boiler and we couldn't say when it was installed because it was here when we moved in. It was only £20 though.

The one for the house we are buying is for the extension that the seller did build, it has been there for about 8 years and it is to do with the fact that the roof is different from what was there before which it wasn't meant to be. Something like that anyway.

Either way our solicitor said they have to get it or we will have to pay. I am hoping they are going to pay as we are already going halves on the cost of the woodworm treatment before we move in. If it comes down to it, we will have to suck it up as we don't want to lose the house over it, but if we can get away with not paying then that would be preferable.

I'll be chasing the EAs to chase the vendors solicitors on this today. It needs sorting so we can exchange.

When we bought our current house our solicitor insisted the vendors bought a policy that covered the kitchen extension and the removal of a chimney breast. The stupid thing was that it is an ex council house and both things were done while the house was still council owned (in the 60s / 80s most probably, certainly before building regs), and to every house along the road, so the idea that the council would suddenly come down like a ton of bricks was laughable.
However, we are now selling our house, and the buyers' solicitor has asked the same questions, and we are able to use the same indemnity policy. We just have to pay a little more to reflect the increased value of the house. The policy says that it covers the current owners (unnamed) and any future owners.
So just thought it was worth pointing out for anyone who is selling... But I agree it is pretty much money for old rope unless you're talking about something done within the time of building regs which wasn't signed off properly.

£100 is pretty typical for something like an extension. Really it is about who can hold their nerve the longest, or you compromise 50:50. In the end if you were to walk away the vendor would have the same issue when they came to sell again however you have the benefit of selling the policy on to next purchaser if needs be.