Indemnity insurance? No building approval? AIBU

[ErickBroch]

to ask for your advice?

Still in a v long process of buying a house built in 1991, had a survey done and all good no complaints, no modifications such as extensions or conservatory in said time either.

Have just been told by solicitors that the seller is not possession of any building regulation approval certificate for the construction of the property.

They have suggested we buy indemnity insurance but it is expensive and seems to have a lot of pointlessness to it, or have said that we shouldn't bother with it as the council only enacts on buildings that would be dangerous to the public.

Don't want to bore anyone with the full email so will post below. Has anyone had this problem? Should I bother spending MORE money on this?? It is a mid-terrace house in a residential area.

Full email if anyone cares:

Further to previous correspondence, we had a response from the seller’s solicitors stating that the seller is not possession of any building regulation approval certificate for the construction of the property in relation to enquiry number 25. The property was constructed around 1991 and therefore it is unlikely the local authority would take enforcement action. Sometimes the local authority’s records are only held for a limited time and it maybe building regulations were obtained but there is just no record.

If you have any concerns regarding the condition of the property, I would suggest that you speak with your surveyor in this regard before exchange. The local authority would only consider enforcement action if the property was dangerous and only then, it is unlikely given costs implications for the council. Enforcement action after all this time is likely to be reserved for items such as a dangerous public building that would cause danger to members of the public.

I can look into indemnity insurance for lack of building regulation approval and will be in the region of £200. If you would like me to obtain a quote, please let me know. The indemnity insurance is a one off fee payable on completion. It will cover you both against any enforcement action by the local authority but it does not guarantee the condition of the property. You must not disclose the policy to the council or this will invalidate the policy. When you come to sell the property in the future, you will need to provide a copy over to your acting solicitors. Indemnity insurance is used commonly to deal with issues such as this but I cannot guarantee it will be acceptable to a buyer or lender in the future. Please let me have your instructions whether or not you would like me to obtain a quote on your behalf before exchange.

Please find enclosed copy Section 52 Agreement in respect of our enquiry number 26 dated 7th May 1990 made between (1) Fairview New Homes and (2) BLANK District Council. This Agreement sets out planning obligations relating to the estate. Please read this thoroughly and ensure you are satisfied with the same. Given the nature of the Agreement and the age of the development, I would presume these have been complied with. There is no evidence of any breach.

This has ended up in relationships, were you aiming for property?

Not sure why this is in relationships...but anyway...we were in a similar position once as a seller of a property and the buyer (a house builder, we were doing a chain-break sale), insisted WE the seller buy the indemnity insurance.

SO sorry - meant to be property. Will ask to delete it. Sorry everyone

Vendor buys the indemnity? £200 is nothing if you have to knock it down! Check the small print though, they'll be things like not contacting the council for retrospective approvals.

It's usually the seller who provides the indemnity.

Thanks everyone, have asked MN to remove this because i am a total plum! Really appreciate all your responses - ironically more than I probably would have got on property!

Not sure about the relationship thing? But anyway a house built so long ago wouldn't meet current regs anyway especially for insulation. And even if it met the non existent standards for electrics at the time, it would have been modified and deteriorated by now.
Personally I'd look and decide if you like the house, and avoid paying out any money for useless insurance.

Surely the seller buys the indemnity insurance as nobody will buy the house without it?

I think the vendor should pay for it, but anyway, building regs are only (as I understand it) something signed off at the time of the building works, so it's not something you can get retrospectively really, as regs change all the time.

Get the insurance. £200 against the price you’re paying for the house, the moving costs, the stamp duty, the solicitors fees, is NOTHING. When you come to sell in the future, that insurance policy might be all that prevents your buyers pulling out.

According to our solicitor, as the house is over 20 years old and regulations change so much, it is is a basically worthless document and the seller will most likely refuse to pay it (we have asked anyway)

Tdm your logic is not quite watertight i feel.
200 pounds is certainly a lot of money for most people, and even so, very few would rationally want to spend that on something of almost no value, regardless of how much other money they are spending. Money is usually more tight when buying a house.
And secondly, if that really is the difference between some future buyer pulling out or not, then they can just buy it at that time. If anything, it will be a 40-50+ year old problem by then.

I’ve been in this position as a seller, we had to buy the indemnity insurance but it was in the buyers name, it was a condition for their mortgage, it was for building control.
It cost less than £300 and meant the sale went through so very worthwhile.

might be all that prevents your buyers pulling out

It is a rather worthless document, given the property in question is nearly 30 years old. It would be a slightly strange reason to withdraw from a purchase.

I wouldn't bother with buying the indemnity , time for enforcement action will have passed . The builders will have more than likely got BR it's probably got lost. Many people won't have the original BR document from when the house was built. It's still standing after 30 years after all.

With us it was a condition for our buyers mortgage, so we had to do it.
The insurance policy is very unlikely to ever be used, so if it’s not a condition then don’t get it.

Thanks everyone for all of your advice it is really appreciated - clueless over here!!