Seller contacted council about unregulated loft/basement – indemnity now impossible. Are we being unreasonable to renegotiate?

[ThatAgileMintBiscuit]

Hi all,

Looking for some advice because I’m really stressed about a house purchase and need some outside perspective. Inspired by great advice given to a fellow Mumsnetter today re building regs. I thought I’d ask your opinions as we also can’t speak with solicitors till at least tomorrow.

We offered £445,000 on a Victorian semi. It was originally marketed as a 5‑bed, then dropped to a 4‑bed as the first sale fell threw as the 5th bedroom had no building regulations and the mortgage company weren’t willing to accept an indemnity policy.

The four bedrooms are all proper legal bedrooms. There’s also a loft room and a basement cinema room, but both were done years ago without Building Regulations approval.

Our solicitor has now told us (in writing) that the seller contacted the council to ask about retrospective approval but did nothing more (I expect the cost) . Because of that, indemnity insurance is no longer possible. The council is now aware of the unauthorised works.

The estate agent and seller are acting like this is nothing, but from what I understand:

• Indemnity is only valid if the council is unaware
• Once the seller contacts them, indemnity is permanently off the table
• This affects mortgageability
• This affects resale
• This affects the value of the house

We haven’t exchanged yet.

My husband loves the house, but I’m really worried about possibly resale and us been out of pocket. If we buy at £445k, we’ll face the same issue when we sell – no indemnity, council aware, buyers asking questions, lenders hesitating, and probably having to drop the price.

We’ve been told that making the loft/basement fully compliant could cost at least £20k–£40k which we can’t justify. We don’t have to do the work, but it will affect future offers.

I also don’t think the seller realises they’ve caused this problem. The solicitor’s letter clearly states that he contacted the council, but the seller and estate agent are just ignoring that part and acting like we’re being unreasonable.

i imagine the sellers already feel like that have lost 15k as the property was down valued.

Any advice appreciated. We asked about building regs prior to putting in an offer and estate agents told us the ‘paperwork was lost’ all very frustrating. We asked why the previous buyer pulled out and they said ‘sorry we can’t tell you that’.

it’s a stunning house, but owners have spent a lot of money on renovations so it looks amazing but sadly the basics haven’t been covered. I.e Regs!

Has anyone dealt with this before?
Are we being unreasonable to renegotiate?
Would you walk away?
Or is this something buyers just accept?

Any thoughts or advice valued.

Thanks.

What do they actually use the rooms for ?

I had work done in my loft a few years ago but even the most casual of observers can see its nothing more than a boarded out loft with a few 'enhancements ' by which I mean a strengthened floor, a velux window, a power socket and light, and a fixed staircase rather than a pull down ladder.
It could never in a million years be marketed as a 4th bedroom because of the beam that goes across the middle which you have to climb over to get to the other side and there is no head height.

To me its a very accessible storage room and its obvious I haven't meddled with anything structural.
Although my cats love it and sleep up there.

But if they have tried to create 'proper' rooms without building regs then I would be concerned about the structure and I think you need to renegotiate or pull out of the purchase

£100k off. You’d effectively be starting again from scratch for both. Nightmare.

Absolutely this...

They need planning permission or 40k off asking. I would want to be very sure 40k would cover it. In my part of london no way would 40k do the job

Don’t walk RUN !! Why would anyone even consider this? thank goodness for checks in this country that help stop people making massive financial mistakes.

The seller was an idiot. I would not want to be paying to clear up the mess he made. Why on earth having failed to get building regs would you then notify the council. Should have kept it quiet. Mind you although I would be happy to buy a loft conversion with no building regs I wouldn't be as happy with a cellar conversion as that could have caused serious structural problems if not done properly.

Pull out. If they hadn’t contacted the council they could have offered you an indemnity, their fault, their loss, don’t do it.

It will 100% be your problem if you need to sell.

Pull out unless they reduce the cost to what the house value would be with a basic basement and loft.
Then you've protected yourself from losing that amount when you come to sell later on, if you find (as you probably will) that it's going to cost a lot more than £60k to get it all legal.

I would walk away. You have been consistently bullshitted all the way through this process. It is a total mess in the making. Why do that to yourself.

Walk away - protect yourself financially and mentally in case it goes very wrong, not counting the time to put anything right

OP have you had an independent building control company visit the house, speak with the sellers (who presumably did the work) and quote for regularisation? Just wondering where the figure for rectification has come from.

Private Building Inspectors can’t regularise works, only the council can. If it was done before 1985 it can’t be regularised anyway.

I know it’s really hard to walk away at this point but I think it’s the only sensible thing to do. It’s entirely the seller’s fault for not being honest. Sorry you’re in this situation.

I think you need to either walk away or offer £340k.

have a good look at what else is on the market. Nothing is selling in our town so anyone in a position to proceed could put in some very cheap offers.

Also you have my sympathies- it’s really shit having to be the grown up when your spouse has their heart set on their dream property. But unless you can get 25% reduction on the price, you are going to have to be the dull sensible one.

I wouldn’t walk away. I’d run.

Experienced renovator here.. I’d walk away basically as you’re buying the issues in a bodge job. The indemnity is there to protect you if the council take action but clearly that doesn’t apply if they’ve been told. But if the house collapses because the walls weren’t reinforced in the basement? That is entirely your problem and your house insurance won’t cover it. Every time I’ve done a renovation, I’ve had to send a building regs cert to the insurers. Of course yours doesn’t know yet about this conversion but they would if the basement collapsed.

i would walk away now.

Yeah, he’s U if he thinks this is going to work.

I’d be walking away, you’d be crazy to continue, it will 100% be a problem in the future.

I would be very wary of this quote without a professional surveyor report. Some loft conversions cannot be made to meet the rgulations without massive amounts of work on the house - height is a particular issue and sometimes you have to lower the ceilings in the rooms below.
Also insulation requirements have transformed and meeting them can cost £££££

Conveyancer here. As you are buying with a mortgage it’s not really up to you. Each lender has its own set of ‘rules’ that it will accept, it’s called the UK finance lenders handbook. I would imagine your conveyancer needs to report this matter to the lender and then the lender will advise what they will accept, they may re value the property or insist on retrospective consent. The lender holds the cards here. From a practical point of view, it’s unusual for someone to do a high spec refurb without pp or b/regs. I would be concerned at the standard of works. As others have said, an indemnity policy is a sticking plaster really, and mainly for the lenders benefit. I would see what the lender says and reduce your offer accordingly. They created this mess, not you. And always remember the agent works for sellers, you should listen very carefully to the advise your solicitor gives you.

Also, just to add, a conveyancer/solicitor is not allowed to tell you not to buy a house, all we can do is present all the facts to you for you to make an informed decision. Personally, I would 100% walk away.

Have you done a search yourself on the council website? I had to find a copy of our building regs and it was there. If they did get them done in the past 10 years they might still be on the website.

i mean you’d assume the sellers would do this but they might not think to.

It would be revealed in the local search result if there was. That’s the point of them.

I don't think they've done enough to the basement to risk it causing the house to collapse. So I agree with those who say compare it to a house that has nothing done to the loft and basement for price comparison. Then, if you still like it, get a structural surveyor or engineer to take a good look at the house to see if it's safe.

I absolutely agree. This house isn’t buyable as it is. Not unless you don’t need a mortgage and love money pits 😟

Something better will come up. Honestly!

I would walk away. Too many unknowns. Too high a risk for me.