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Original poster

Vendor refusing to obtain indemnity policy

38 replies

Neron · 14/01/2020 10:27

Buying a bungalow, literally the only outstanding thing is an indemnity policy. A huge conservatory has been built and they don't have a building certificate and have refused to buy the policy (about £100).
We had a full structural survey, flagged new flat roof to be done immediately. We decided to swallow this cost ourselves rather than dick about.
Can I ask - is it normal for the vendor to refuse and for us buyers to pick it up?

OP posts:

maidenover · 15/01/2020 17:02

If you know the roof and guttering are in a bad state of repair because of your survey what exactly are you getting an indemnity for?

My personal prediction is that indemnity policies missold during residential conveyancing will be the next PPI type scandal.

Mildura · 15/01/2020 17:17

If you know the roof and guttering are in a bad state of repair because of your survey what exactly are you getting an indemnity for?

If I have followed correctly, the roof/guttering issue were highlighted in the survey. An entirely separate issue is that it has been discovered the conservatory does not have the required building regs approval.

My personal prediction is that indemnity policies missold during residential conveyancing will be the next PPI type scandal

Couldn't agree more, total con.

WombatChocolate · 15/01/2020 17:25

IT can't be bought by the buyer, but the seller can buy it and the buyer funds the cost.

It's not worth losing a house you want for £100 - it's a drop in the ocean. You might feel peeved that seller won't pay and feel it's a point if principle that they should, but get over that. If it's the house for you, you'll kick yourself if you walknawaybfor £100 when you'll have incurred big costs already.

If there are other issues making you doubt the house, fine, then walk away...but not if this is the only issue.

Did you say you didn't push for a reduction in price due to the roof work which needs doing? Not hats far more serious and expensive and worth pursuing. If you haven't, why are you bothered about £100? The indemnity really doesn't do anything but satisfy the mortgage lender and you can't proceed without it, but it won't help you cover the cost of the roof etc.

If it's about money, negotiate on price due to roof. Otherwise pay up and move on.

Drabarni · 15/01/2020 17:25

The last house we bought the solicitors did the same. I've never heard of it before.
They wanted guarantees for work we hadn't even had done, then expected us to pay an insurance thing.
Fuck that, and what's all this about expecting vendors to pay for stuff that comes up on a survey?
You either want the property or not, there's lots we have had to do over the years when buying a new place.

VinandVigour · 15/01/2020 18:29

Estate agents will often pick up part or all of the tab for something like this, better than missing out on all the commission if the sale falls through.

WombatChocolate · 15/01/2020 18:36

Really? I do wonder about this as it would set a dangerous precedent. Is it honestly common practice?

VinandVigour · 15/01/2020 19:51

Well, if it meant stopping a chain from collapsing then we would ask say the two vendors to pay half each and there would be an adjustment to their bill at the end. Obviously we wouldn’t get involved direct with the solicitor, and wouldn’t contradict their advice.
I know people complain about Estate Agents but I worked for one where customer service was paramount. We would go out if our way to get everyone moved to where they wanted to be at the time they wanted it. It is extraordinary what people will not pay, when they have paid thousands for surveys, Solicitors fees etc, and won’t pay a £50 indemnity which is a condition of a mortgage offer.

We once had 8 properties between us and another agent in the town all in the same chain and it fell apart because the men (and it was the men) at the top of the chain got into a standoff about whose work meeting was the most important and one wanted to complete on a Thursday and one on the Friday of the same week. They couldn’t agree, so the chain collapsed after 4 months, all those people had surveys, mortgage fees, and solicitors fees to pay on £million homes, so a £50 adjustment here and there is totally worth it if it can stop that level of ridiculousness.

Africa2go · 15/01/2020 23:24

OP the policy protects you as the buyer, not the seller.

Original poster

Neron · 16/01/2020 15:02

@Mildura you are correct. The roof is a separate issue, it's the conservatory that has no building certificate (built in 1993) that the bank want an indemnity policy on. Vendor won't buy it as his solicitor said it's a non issue, but as the bank wants it, we have to pay up.

@Drabarni if you read my OP we didn't ask the vendor to fix anything, we're swallowing the cost of the new roof.

To clarify again, we haven't walked away. We just found it annoying that we had to pay it or it doesn't go through. Our solicitor said it should be the vendor who buys it, their issue and it will be flagged for whoever bought it. However, they refused which is their right of course.

OP posts:

OnTheEdgeOfTheNight · 16/01/2020 15:09

Are you sure that you want this house at this price? I don't think many people would accept the list of repairs without negotiating on price.
There's always the unknown unknowns that you only discover when the furniture has been moved out...

Original poster

Neron · 16/01/2020 15:10

@WombatChocolate we didn't go back about the roof as we didn't want to mess about. We got 5k off the purchase price already, and BIL and DH will do the work between them so won't cost as much as a contractor. We are putting a sky light in anyway (really long room, only one end with natural light) so figured what was the point. If you read my other responses we have indeed paid up and moved on. Was simply a question on here as we hadn't come across it before. We were also thinking it was a yearly policy but learnt from the thread it's just a 1 off which is better

OP posts:

Original poster

Neron · 16/01/2020 15:15

@OnTheEdgeOfTheNight the last house we were buying fell apart day before exchange and needed more work and was 30k more expensive and smaller. We kind of feel like we have a good deal here

The surveyor was excellent and we expected a few things because it's age (1950). He thought it was an excellent purchase otherwise and so did BIL who's a successful builder and carpenter. Once its all done it'll be awesome plus it's detached with a huge garden and driveway and we wouldn't need to move from it

OP posts:

Mildura · 16/01/2020 16:33

That the conservatory was constructed in 1993 is key information.

Your solicitor will almost certainly be jointly acting on behalf of your lender, so it is really your own solicitor who is taking what I would suggest is an extremely over cautious view and recommending an indemnity policy.

The only thing an indemnity covers is the risk of the council taking enforcement action against a homeowner for not having building regs when they should have been obtained. The chances of the local authority taking action in relation to a 27 year old conservatory is non existent.

However, the cost of the policy is only £100, which is insignificant when compared to the cost of the property, and the expense of buying/selling. Therefore someone almost always ends up paying it, despite it being totally unnecessary. The whole thing is a con, imho.

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