Indemnity insurance?

[catlass]

We are in the middle of selling our house and the buyers solicitors have brought up a couple of things:

1. we have an open plan dining/kitchen. It does look like that at some point a wall between the two was opened up o make it open plan. However we have no proof that this was actually the case and if it was built as it is.

2. we have a driveway in the garden. Again no proof that planning permission was sought for this.

Now when we bought the house about 5 years a go none of this was brought up to us buy our then solicitors . Now our sellers solicitors are wanting us to pay 235 for indemnity issues to cover this.

I'm concerned tho as if we are paying this one off cost won't that mean the insurance would be in our names and therefore we might be liable? Why should we pay this and not the buyers and further why should it be paid at all when it was not brought up as an issue when we bought the house?

Have messaged this all to solicitors but wondered if MN had any idea?

The protection is for the buyers so it doesn't need to be in your name, you're paying for the premium but it will be in the buyers name for their benefit - once you sell the house, you won't have any liability. The insurance is to cover the buyers so that if the council / freeholder maybe comes along and says no permission was ever granted for drive or buildings regs sign off was not obtained for the kitchen diner knockthrough etc, and they have to incur cost putting it right, the insurer will pay that cost.

It is fairly standard practice if you haven't got all the documentation you should have to demonstrate that everything is in order with the house. To be honest, your solicitors should have flagged this up to you when you bought the house.

It's a very common problem as we found when buying our last house. Our solicitor arranged for the policy (from what I remember) and the vendor took the cost of the policy off the agreed selling price. Basically, as seller it's your problem to sort. An indemnity policy is the easiest way. We were advised not to approach the Council enquiring about any permissions as this would indemnify the policy. It's an easy solution tbh.

Ok thanks both that puts my mind at rest that we wouldn't be liable in the future. Angry that this wasn't brought up when we bought the house and we have to pay out yet more money but hey ho.

Hi there, in my experience this is normal. I have both bought and been the beneficiary of such indemnities - one for the wall scenario you describe.You have two choices 1. Suck up the £235 and progress your house sale 2. Don't pay and the buyer may pull out. Sounds like your Solicitor either missed it or did not feel it necessary to pursue - ask them if you are using the same firm again they might negotiate/ persuade the purchasers solicitor. However your buyer's solicitors are doing a belt and braces job and if I were the buyer I would listen to them. The insurance leaves you free to enjoy your new house and is for your purchaser. In the grand scheme of things I have always felt what I had to lose in terms of £ I had invested in the new house outweighed the £ required for indemnity insurance. You are allowed to be pissed off at the unexpected cost though, just don't let it ruin your next home!

Indemnity policies can be passed on. It is more to protect against future enforcement.

Thank you, glad to hear it's normal!

Prada, we are using different solicitors this time as our previous ones went bust apparently! Now i know why...

Looks like we will just suck it up grrrr

Sorry to hear that catlass maybe try the professional body that regulates solicitors as they would have to had practised with professional indemnity insurance? You might be able to claim off that if the new solicitor can confirm it should've been picked up? Worth making a call to find out? Check the paperwork from your last move f you have it for a company number etc good luck!

Ahhh I would have never have thought about that prada, thanks very much I'll look into it!

I work in EA and there are all sorts of things now that require indemnity policies to protect. I think 5+ years ago none of these things were seen as problems but now solicitors seem to want to look under every rock they see and of course the more they do this the more questions arise - I think the insurance world must be making loads of money from properties being bought and sold these days. I think every one buying and selling these days should be prepared to have to fork out for an indemnity for something or other - it is not worth losing your sale or purchase over. Good Luck with the sale.

We are in the same position. Our lawyer said it's essentially a scam because after 2 (or was it 5?) years after the changes to the property the council cannot do anything about enforcing the regs. But that if we don't cough up the purchasers might pull out. The only beneficiaries to these insurance policies are the insurance companies.