What is building regulations indemnity insurance? Do you really need it? How can you get one and what does it cover?
What if you are selling your house and you don’t have any building regulations for your kitchen extension. What should you do? You want to sell your house, however, the previous owners put up a kitchen extension which does not have any certificates of building regulations. Now, the buyer’s solicitors are putting your house sale on hold due to this issue.
Once a structural work or any works done to a property has been done, the house owner must get a completion certificate in order to confirm that the work has been accomplished based on the standard required by the local Building Regulation Department.
In order to get this certificate, you must inform the inspector so he can supervise the work right from the beginning. However, if the work has been done and you don’t have a completion certificate for it, then it does not mean that the right procedure was not followed or the work is not up to the standard. However, the building regulation officer won’t be able to give you a completion certificate since they have not inspected the work right from the very beginning.
The best way to resolve this problem is to obtain a building regulation indemnity insurance. This policy can either be bought by the buyer or the seller.
What is building regulations indemnity insurance?
Most likely building regulations indemnity insurance is needed when you sell your house, or you want to purchase a house.
Generally, conveyancing solicitors would recommend that you should get this policy in case there is some work being done to the house and there is some doubt from the local authority if it is approved by the building regulation. For instance, an extension of the house has been constructed.
In case you don’t have sufficient evidence that your planning was approved then you can also get indemnity insurance for planning permission.
Do you need building regulations indemnity insurance?
During a house sale, it is only appropriate that all the paperwork must be checked thoroughly. In the event that there is no completion certificate which proved that proper building regulations have been approved, then the buyers’ solicitors would likely ask for an indemnity insurance policy.
The building regulations indemnity insurance can help in protecting the new homeowners as well as its succeeding owners in the event that a case will be filed by the local authority in relation to the building regulation. Typically, the local authority can impose a removal or alteration of the work in case that it does not conform with the building regulations. This policy can pay for the legal fees and other expenses related to this issue.
Practically, only a few people are claiming building regulations indemnity insurance. In fact, some people are doubtful if this cover is actually necessary. For instance, it won’t cover the cost of altering the work being done. However, most people would choose to avail building regulations indemnity insurance so that their house sale would advance. If you are selling your house, then most probably the buyer’s solicitors, as well as the mortgage lenders, would require you to get an indemnity policy before the house sale can proceed. Conversely, if you are buying a house, then your conveyancing solicitor would likely recommend that you should get this policy before you proceed.
But keep in mind that according to Section 36 of the 1984 Act, once the work being done to the building has been accomplished for 12 months, then the local authority cannot force you to modify or get rid of this non-compliant work.
How much does building regulations indemnity insurance cost?
If you need help in finding a provider that offers this policy, then you can consult your conveyancing solicitor. Most often the cost of a building regulations indemnity insurance policy will greatly depend on the worth of the property as well as the work being done on the property.
So, who will be paying for the policy? The decision will be up to you or the other party. Maybe your solicitor can also help in deciding who will pay for the policy. Since the buyers of the property can benefit from the policy then they can pay for it. But in some cases, the sellers are also required to pay for it since the lack of documents for building regulations was their fault. Having this policy in place can permit the house sale to progress. Oftentimes, the cost of the policy is shared by both the buyer and the seller.
The building regulations indemnity insurance can only be bought once, not like any other types of insurance. This policy does not expire which means that it remains valid even for the future owners of the property. Having this policy in place can help in making the conveyancing process run smoothly in case the present owner decides to sell the property in the future.
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