Purchasing a house with illegal annex

[BananaMoon4]

I have posted another thread about a house we offered to purchase. The house was at least 100k more than other houses in the street. We decided to go for it as the annex would be a great asset to us.

Now after paying for solicitors, survey, valuation and mortgage fees, it transpires from searches and survey that the annex is actually a garage that has been converted illegally. Vendors and agents saying 'its fine, we will put an indemnity policy in place and the council can't do anything about it as it's over 10 years old'

Maybe the council can't make us pull it down, but it clearly wasn't built to any building regulations and we purchased on the basis that it was a separate dwelling for my mum to live in.

The valuation came back that we had paid a little too much IF the annex was legal. If it was not, which it isn't, we were told the value of the house is 'significantly less' and this has been flagged by our mortgage company

I offered to continue to pay the price we offered if the vendors obtained a lawful change of use certificate, and had a builder / electrician / plumber bring the annex to modern regs making it safe and habitable, as we were sold.

The vendors are refusing to do this.

I asked to renegotiate the price as we would not have offered what we did if we knew it was an illegal garage conversion and not an annex (it is completely separate to the house) they offered us a 1% reduction on the price (10k). If we had to rebuild the annex as it was unsafe or uninhabitable, it would cost us upwards of 100k - which is what we were over paying for in the first place.

We are going to proceed with the sale of our house and go into rented to prevent the chain of 5 beneath us collapsing because of this. Also with the market a bit unstable ahead of the budget we might just wait and see what happens.

Is this one to be walking away from? Is there any recourse on the 5k we have already spent as we agreed a price based on a habitable annex? Our solicitor said there wasn't as we haven't exchanged.

Are they obliged to be truthful to buyers? Both ourselves or future buyers? To prevent another family being disappointed and out of pocket? As surely it will continue to flag until they fix it!

So deflated with the whole process!

Afaik converting the use of an outbuilding, particularly one to be used for sleeping, needs planning permission and I’d guess building regs too assuming heating and ventilation will need to be up to spec to reduce the risk of electrical fires or carbon monoxide poisoning.

And as pp mentioned it could increase the council tax band ?

100%

I would run away from this purchase so fast!

I would run not walk. I wouldn’t report them to council though.

Run away! This has expensive disaster written all over it. You could be forced to knock down the whole structure and pay for a new one, having already massively over paid for the house.
Apart from that, I'm not sure where you, as new owners, would stand on the council tax arrears that the previous owners owe. I've never reported anyone previously for something illegal but I would definitely be tempted to do so here.
Go into your rental and take stock.

What do your solicitors advise about this, OP?

This. If its about to fall down or set on fire, then testing and surveys by tradesmen will pick that up. Theres no such thing as an 'illegal annex' in the context you're talking about which is they had a garage already and just put stuff in it which means its usable as a room/annex. Its a conversion that cant possibly meet current regs and even if it wasnt signed off at the time, you can test that out.

However if you wont or cant pay the price they want and they wont or cant reduce it becuase you feel that its a garage rather than a dwelling for your family then you'll have to walk away

Did you have a survey and did it cover the annex? There is a considerable difference in financial implications between a building that was converted to a decent standard (what did they use it for?) even if it does not meat current regulations and one that was not. Most likely any property you buy will not meet current building regulations standards, it will meet those of the time it was built, if there were any then.

If the owners have proof it's been there 10 years you wont be told to convert it back to a garage so the question is really how much to get a certificate of lawful use (but it may be, say, 9 years and they want to wait ti out). Then how much to upgrade if that is needed.

The previous people perhaps "couldnt get a mortgage" because of the lack of documentation. You should withdraw if they wont take a lower offer and explicitly say it's because of the lack of proper approval for the annex. That may stop them wasting other people's money.

You haven’t bought it yet so you don’t have to buy it. Council cannot take any enforcement action after 10 years. You can get an indemnity policy in place just in case. The resale value will be affected as you can’t market the annex as habitable, but if the property works for your current housing needs then I’d weigh it up. Personally I’d insist on a price reduction to reflect the value of what is actually habitable, and if the vendors refuse then let them remarket it and go through the same rigmarole with any other buyer, in what is now quite a stagnant market. A decent EA will explain that to them and bring them to the negotiating table.

Qualified planning officer actually, it’s not a criminal offence to do development without planning permission therefore it’s not illegal. This isn’t a dwelling, it’s an annex that appears to have been there for 10 years, hence it’s probably lawful, in fact as its residential they probably only have to show 4 years use for it to be lawful. I’d question who is the one talking total crap because it isn’t me.

Run away. The vendors are dickheads. Buy a house without an annexe (make damn sure you can get PP for one first) then do the conversion yourself to high standards.

this one will have been done to shit standards and won’t be fit to house a pet dog let alone a relative. Run away from it now.

i have to say, two mins on the council website would have told you their annexe didn’t have PP.

you should have checked this YOURSELVES before you even viewed it, let alone spent money on surveys.

Sorry to be tough but you’ve been pretty dopy not to had made such basic checks yourself. Wise up and consider this a lesson learned.

If it has been in place for as long as you say, there is no action that the planning department will take, unless you start trying to use it as something other than ancillary accommodation, ie renting it out as a separate unit of accommodation to a person unconnected to the rest of the household, which doesn't sound like it's going to be the case.
From a PP point of view, there is no drama necessary, and I say this as a Planning Enforcement Officer.

Yes probably my other thread. Advice was to pay the extra 100k for the annex as it would be hard to build a 1 bedroom house for 100k and all the hassle that would go with it. We thought that too which was why we decided to pay a bit more and go for it. Unsurprisingly, the house that was 100k cheaper has now sold!

Update - after emails between the solicitors and estate agents, and the vendors constantly ignoring all queries about the annex / refusing to sort it, they pulled the house from the market with immediate effect and said there were no longer selling.

It speaks volumes about their honesty and integrity.

So we will move into rented and wait it out.

Any advice on what to do if they try and remarket again with this 'annex'. I really don't want another family to go through this and lose thousands of pounds in the process too.

I think it’s for the best that the house has been removed from the market.

If they do re list it the same problems will arise as the annex will be subject to the same searches / enquiries. It would be on the agent they list with to try and be upfront and honest about said annex. They could re list it without the annex being taken into consideration but you’ll unfortunately not be able to stop them from doing so.

The annex situation is best suited to a cash buyer who isn’t subject to a lender etc. If it’s desirable enough they will hopefully that kind of buyer.

Hope you find something suitable for your family soon 💐

They sound really shady and I firmly believe that this would have been the tip of the iceberg had your proceeded.