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.

I’d walk away tbh as you don’t know if you will get retrospective permission. If you really do want to go ahead, then I’d insist on a substantial discount to compensate for the lack of indemnity arising from the sellers own conduct (keep in mind building work nearly always ends up being more expensive than necessary).

A relative of mine bought a beautifully renovated home. However, once living there issues slowly began to surface and once they scratched the surface fixing problems that had been hidden meant ripping everything out and starting again. So don’t be swayed by what it looks like now!

I wouldn’t walk away. But I am a RICS surveyor and a chartered building engineer, with a career in building control. I’d renegotiate on the price. A tanked existing basement is not a structural concern. A loft conversion is relatively easy to make compliant if the price reflects the cost.

No way will you get the work done for £40k.
Not even in 2015 never mind now.
Walk away -it’s a disaster of a money pit waiting to happen.

Thanks everyone — this thread has honestly been so helpful and has made me think twice. I’ve shown DH the responses and the penny finally seems to be dropping. Just wanted to add some clarification I should have included earlier.

The sellers originally marketed the house as a 5‑bedroom property. Then when it fell throughast time They have remarked as a 4‑bedroom listing, and removed the images of the bedroom from the listing. which I assume was their attempt to get around the Building Regulations issue with the loft room.

Loft:
The sellers bought the house with the loft already converted. At that time, an indemnity policy DID exist, which is probably why they never questioned it. The loft room also has an en‑suite (shower, toilet, sink) and the plan was for my 17‑year‑old daughter to have that space.

However, our solicitor has confirmed in writing that the current sellers contacted the council to start the process of retrospective approval, then didn’t follow through. Because of that contact, indemnity insurance is now impossible going forward. The council is aware, and insurers won’t touch it.

From the survey, the loft looks like a basic conversion: plasterboard, electrics, flooring, en‑suite added, but no evidence of Building Regs, no structural sign‑off, no fire‑rated doors, no protected escape route, no insulation to current standards, and no proof the floor joists were upgraded. So it’s a “room,” but not a compliant habitable space.

Basement:
The basement is being marketed as a “cinema room.” In reality, it looks like a standard Victorian cellar that’s been made more liveable — plasterboard, flooring, electrics, decorating — but no structural changes and no sign of proper tanking, ventilation, fire escape window, or electrical certification. So again, it’s a usable space, but not a compliant habitable room.

So it’s £445,000 for a 4 bed property with a cinema room at the moment. From the answers we will renegotiate. Also as one person pointed out we are awaiting to hear back from the lender as they may not mortgage the property due to lack of building regs.

Thanks again all.

Walk away. Don't make this your problem.

and insurers won’t touch it.

Who insures it now? How long have the the current vendors lived there?

@ThatAgileMintBiscuit this with bells on. We’ve done enough renos in our time and I can see what’s coming 😱

@ThatAgileMintBiscuit

You could always get a structural engineer and building surveyor report done if you decide to go ahead as that will at least give you a more accurate idea of the costs involved, and will confirm whether it's structurally sound/ safe.

Maybe at the seller's cost as that will cost £2-3K?

That way, if you don't go ahead, they've still got the report for any future interested parties.

Is the existing indemnity not transferable to you as buyers? Or has the sellers contact with the council invalidated it? I appreciate you can't get a new one but I have had existing ones transferred on sale. In reality the council will not take action after this length of time and the indemnity wasn't to confirm the works were safe but to indemnify you against council enforcement for the unauthorised work. If the survey hasn't picked up any structural issues I wouldn't be concerned about the works themselves, only thereduction in value and impact on a future sale.
I would seek 3 valuations for the house as a straight forward 4 bed, without the loft or cinema room, and offer on the basis of these. You can then regulated the unauthorised rooms in future if you want to.

I am sorry, but however much I loved the house, I'd walk away.

Personally I wouldn't touch a loft conversion that hasn't got a means of escape window that allows the person to be pulled out by the fire brigade alongside fireproof doors at the top or bottom of the staircase to upstairs
A fire / smoke in the kitchen could spread to the loft extremely quickly, and without a 30-minute barrier, and a way to actually get out of the room, it'll be far more tragic than just money.
Additionally, adding extra weight onto old ceiling joists. (In the absence of new properly installed roof joists for flooring), especially if combined with removal of any structural timber in the loft and even changing from slate to concrete tiles can cause the house roof to spread out which could collapse it.
The s
Cellar is a bit more manageable, but again, a way to escape and checking out electrics would be a very good idea

No insurance is going to touch this. A basement might have all sorts of issues as so might the loft. Indemnity insurance does NOT put right construction faults. So @ThatAgileMintBiscuit you could be buying a piece of Gerry built unsafe shit. You cannot possibly have been given accurate pricing for remedial works.

Yoy can take this on but you need to know exactly what needs to be done to make the loft fire compliant and safe. This might actually be impossible! Headroom and various other regulations come to mind.

The basement could be a whole enormous can of worms. How do you know it’s constructed properly? Is it designed to drain effectively and what about retaining wall calcs? Again, can you actually get BR approval? Has the basement been excavated? If so - big red flag!

You don’t of course have to use either of these spaces as habitable spaces so when you sell, you exclude these areas from habitable space. So in some ways the EA is correct. However adjust the price right down. Don’t use the loft room as a room unless you get BR and fire regs are followed. Ditto the cellar/basement. If the basement has been excavated and you cannot meet BR approval requirements, I’d walk away. It will just be a real worry.

Honestly, I wouldn't touch this. I'd want the owner to put everything right and signed off before I went anywhere near it! Lord knows what you'll find when you start digging!

@ThatAgileMintBiscuit as PP say “it depends”.

Is the price a reasonable price for a 4 bed in that road with boarded loft and basement (which is effectively what it is)?

How long ago were the existing works completed? Planning is probably not the issue, building is only an issue if you are using the loft as a bedroom and the basement as a more of a living room (and possibly not even then). Plenty of people board out lofts and basements to use as studies, playrooms, utilities or the proverbial internet basement or shower facility. The building regs are mainly relevant if you want to actually sleep in the rooms or if something structural has been changed poorly. Presumably the surveys included electrical safety?

If the price reflects a house with the fifth bedroom and extra reception then yes you want to renegotiate but you suggest the current marketing is not this? Get a local builder to advise on likely cost of remediation for each room to a full use fifth bedroom and extra reception and speak to your surveyor in person to discuss if any structural changes were made in addition to boarding/tanking. If yes, then a structural engineer report may be useful and the seller may pay.

“everything will need ripping out” and “you won’t get insurance” are alarmist and unlikely to be true. You do need a realistic idea of costs to make it a full five bed plus extra reception compared to the price you are offering.

OP, I'm in the building trade, what you have is not uncommon, but it's a mess.

The issues you face are:

You are absolutely correct that contact to the council will mean indemnity insurance is invalid or unavailable forever going forward.

The council are aware, so could request to inspect and enforce, and you would not be insured against it (that's what the policy you can't get does)

The two spaces cannot be counted as anything other than a loft and a cellar, the house is worth no more than a house with a loft and a cellar - in fact it is worth potentially less as you may need to fix what's been done.

You will have to apply for regularisation via the building control or a private building inspector, this will cause at least some damage where walls are opened to check various things.

Any defects must then be corrected before retrospective certification is awarded, but be aware that it may be un-economical or impossible to make what is there comply and you may have to start from scratch.

This is my view too.

@Dusktilldawn99The fundamental issue with the basement is that if retaining walls have been built and the floor dug out, it could well have issues after 20 years! A faulty designed, or not designed, basement wall can certainly collapse and undermine the structural stability of the house. Victorian houses have shallow foundations so how the basement is constructed does matter.