Indemnity Policies

[JillJ72]

Hi there. I don't post very often but have been doing my research on here (so much useful information!). We've had our structural survey done on our Victorian purchase and all is OK. We need an indemnity policy as the structural changes were done pre-1985; the structural survey and mortgage valuation survey haven't thrown up anything of concern (the bank doesn't seem at all interested!).

Our question is - who sorts the indemnity policy? The solicitor, the mortgage broker or us?

Thank you!

We needed one when we sold our victorian maisonette recently as it had a loft room with no regs.The solicitor sorted it out and it cost £200 which we paid to our buyers at completion hth

Solicitor. We had one for non Fensa windows at the property we were selling and another for the uncertified loft room here. First cost about £75 , second £200.

Thank you, that's really helpful. Our solicitor doesn't agree with this idea but as structurally everything is being OK'd, we assume final word rests with the bank. Just want to see an end to this!

I don't understand why you need an indemnity policy for pre-1985 works, especially if the bank isn't interested. What reason have they given?

That's interesting, fridayschild. When this whole debate started after the mortgage survey, our solicitor started talking about "No to an indemnity policy". If the work had been post-1985 then we would have wanted someone to inspect the work and give the nod that all was OK (or put a notice on for remedial works). As such, with the work being pre-1985, we actually don't know what happens next. We're waiting for our solicitor to respond - do we need an indemnity, does the bank prefer this or are they not worried, etc etc.

Sigh...

I would ask the vendors to meet the cost of your indemnity policy as when you offered for the property you offered for it assuming that all deeds and permissions were in order. It is not uncommon for the vendor to meet the cost, though I think legally it must be you who purchases your policy as the new owner. It will be purchased to go on risk on the date of exchange.

I am surprised if the date of the works is all that triggers the need for the policy. Works done without proper consents (like the loft conversions others on this thread have mentioned) yes, but the mere fact works have been done? Doesn't make sense to me.

If you can be more precise I might be able to be more constructive!

The structural changes were removal of ground floor level chimney breasts and the living/dining room wall, all estimated to have been done ca 25-30 years ago. Our solicitor did (quite rightly) ring alarm bells when we had the mortgage survey back, but the structural survey came to the same conclusion (risk of damage is "remote"), it dated the work as being 25-30 years old (DH rang the Council informally - they're not interested because there haven't been any problems to date). Unfortunately our solicitor is off sick, hopefully back tomorrow. He is doing a good job for us, we just need to know what happens next, and how long it will take!

I think you need a certificate of satisfaction (Or it's called something like that) from your local council's Building Control Dept. If you cannot provide them with the necessary paperwork for the work (because it was prior to building regs legislation) they will not give you a certificate. If your house has chimney breasts removed it is essential that the work was properly done as some people remove the breast in the room but leave the stack in the loft and on the roof (not a good idea as you can imagine). This is your vendor's problem as his paperwork is not in order.

DH gets all ranty about about indemnity policies. The building society chose the policy WE pay for it. But the bloody insurance company still come after US for the money if anything goes wrong.... or that sort of rant.

So basically... its insurance to cover the lender that YOU pay for. If the lender claims on that policy, the insurance company come after YOU for the money, AFTER they have compensated the lender IYSWIM.

our solicitor did ours

one for non fensa windows
one for lost deeds

It doesn't just cover the lender - it covers any liability incurred from the particular risk insured. For example, if the chimney stack was not removed correctly and one night the remainder of the chimney stack collapsed causing considerable damage to both yours and your neighbour's roof, you would be covered.

Or in our case for the loft room whcih was contempoaray with the house(1993/4) but has no actual Building Regs certificate either because it may predate them or be part of the original plans (staircase is certified as added later). If , for example , we wanted to add dormers and Planning then raise any issues remedial works to bring it up to current specifications should be covered. Had we enquired of the Council at the time and found out it was neither scenario we would n't have been able to take the policy out.

I don't know what to think, and our solicitor's not being very transparent. Part of me wonders why it's all so damned difficult (sorry, very grrr at the moment), but at the same time we don't have any funds to pull out and start again. We will have lost so much and it's all or nothing.