Buying house without full planning, building regs, or convenant approval

[EYDavis]

We are working through the process of buying a house built in 1900. At the last minute, it has become apparent that two changes have been made to the property over the years without planning permission, building regulations approval, and in breach of a restrictive covenant, which is in favour of the National Trust.

The first development is the addition of a single storey garage extension (1968) and the second is the conversion of a former integral garage into a living space (1990).

We are being told that the way forward is to buy an indemnity policy (around £500), which would cover expenses in the event that enforcement action was taken by the local authority or the National Trust. However, this would likely not compensate for the loss of value to the house (which might be considerable) if the unauthorised works were reversed. The policy could be transferred with the house for the benefit of future owners.

These policies are usually invalidated by any attempt to inform third parties and so accepting this arrangement would mean we could not seek retrospective planning permission and covenant approval in the future.

All our solicitor will advise is that the risk of enforcement action so many years later is low. However, the risk is not zero and no-one can really say what impact this might have on re-sale. Clearly it is causing us some anxiety and we presume that future buyers would feel the same way.

Although the property was reduced a number of times, we are probably paying very slightly over current market value given how prices are falling in this price bracket locally.

So should we (a) buy and try and make things "right" at our own expense, (b) buy an indemnity policy, (c) make the seller buying an indemnity a condition of sale, (d) ask for a price reduction to share future risk with the seller or (e) run a mile?

One addition... we do not have a mortgage and so are not bound by the requirements of a mortgage vendor.

An indemnity policy is frequently used to cover these sorts of circumstances. In your case, considering the alterations were so long ago it is extremely unlikely the council will ever take action. I think there may be a time scale where they can no longer enforce anything anyway.

We had to buy an Indemnity policy for our last house as the attic conversion didn't have building regs. They buyers seemed quite happy. It cost around £100, nowhere near £500.

We've recently moved to a bungalow which had a plastic roof on the conservatory. We've just had a new solid roof put on and removed the old external doors so it's one big open plan space. The company were meant to get building control approval & building regs but they've just gone into liquidation so we have no paperwork at all. We are pleased with the conversion, it's fab overall and has transformed the place but if we were to sell we would have to get an indemnity policy again.

I think it depends on how much you love the house, and how much risk you feel comfortable taking. Do you plan to stay there forever? It may be that changes you make over the years would involve adapting previously unapproved works, and in doing so you would get building new regs and planning approval for any new alterations which would supersede the previous unapproved alterations.

If I loved the house I would go ahead.

In terms of planning the works become lawful after 4 years anyway and immune from enforcement action -
www.attwatersjamesonhill.co.uk/blog/2017/04/ive-heard-10-4-year-rule-planning-mean

Looks like there wouldn't be any action from building control either:
www.planningportal.co.uk/info/200128/building_control/38/building_regulations/3
I would go back to your solicitor in light of the above.

I agree with villageshop - highly unlikely council would take action now imo.

Not sure about the National Trust and how strict/lenient they are with regards covenants. I think I would do a bit of digging online to try to find out. Ie, look to see if they’ve taken action against homeowners in similar circumstances and then decide whether to proceed.

We bought an indemnity policy on our home (no planning approval for the very, very old loft room in our 1850s semi). It didn’t worry us as we loved the house. Bought policy nearly 17 years ago and think it cost £125 so £500 seems highly excessive. I’d query this cost with your lawyer.

It is possible to get an indemnity policy that does cover you whilst you try to regularise things - we have one for an unregistered piece of land we are currently in the process of registering with the Land Registry. We checked when we bought the policy (10 years ago) that we would be covered if we tried registering the land, and checked again last year before we contacted the Land Registry, and they confirm we are covered. Ours was through Aviva, we (our solicitor) had to speak directly to an underwriter for the bespoke policy but it wasn't any more expensive than the off-the-peg policies (with the clauses about not speaking to third parties etc) our solicitor initially offered.

I’d expect the vendors to foot the bill for the policy as it’s their title defect. The premium might be so high because the party that has the benefit of the covenant is known and is unlikely to fall away in the future.

Thank you all. We will explore the possibility of finding an indemnity provider that might permit us to put things right over time!