Building Regulations and Indemnity Policies

[Legal Type]

Hi

I have a question about Lack of Building Regulation Indemnity Policies.

All of the policies I have come across specifically exclude any internal building works done within the previous 12 months.

The policies only pay out if the Local Authority planning department seek to enforce against the owner. This enforcement is done under s.36 of the Building Act 1986.

However, under s.36, there is no power to enforce after 12 months.

This must surely mean that the indemnity policies are not worth the paper they are written on, as the policy will only be issued after 12 months and no enforcement action can be taken after 12 months, thus meaning that the policy would never kick in?

I would be grateful for any comments.

[tony1941]

Sounds about par for the course for an insurance company to me!

[buildersmate]

I can't check the wording of s36 of the original 1984 Building Act because the ODPM doesn't put it on its website, but I'm sure you've checked it. There is certainly nothing in the subsequent legislation added in stages since 2000 which have merely added more things for BC to check for, and haven't changed the framework of the original Act. Sounds like a Catch22. I would try 1) challenging the insurers with your analysis 2) trying to post this enquiry on a more specialist architects or civil engineers website - if I can find one for you I'll post it.

[Legal Type]

Thanks for that. It would appear that there is a power for the planning authority to apply to the court for an injunction, but having spoken to my local planning authority, they say they have NEVER applied for one, and would only do so if the state of the building presents a serious and imminent danger to others.

I also spoke to an insurer later on Friday who offers these policies, and the indemnity manager was quite frank with me, and said that this is cheap insurance which is taken to enable a sale to proceed - they draft it the way it is to specifically ensure hardly anyone ever claims... there's an admission for you!

I think that if nothing else, people should seriously consider whether they are going to accept this insurance in lieu of a retrospective clearance certificate. I can see it might be useful where there has been a minor infringement, but it is definately worth pushing to get the local authority to check it over before you buy a house, as they can come out the same day and it's only a couple of hundred quid - if the vendors refuse, what have they got to hide?

I wish I had done the above as I have found the previous owners of my house removed the structure that retains the front wall, and �25k of work needs to be done to remedy, which I need to now sue the surveyor for missing (it was exposed).

[matchmade]

Getting a regularisation certificate is a nightmare - you have to know when the works were done, Building Control have to check the Regs as of that date and charge you �500 just to look at it, and works may have to be done. Any seller is just going to walk away from that - hence why they offer an indemnity. Do you really want a regularisation certificate, if you look at the flat honestly re. safety and sound insulation?

[housemover]

Also, does anyone know the approximate cost of these policies or does it depend on the cost of the original construction?

[Legal Type]

The cost of the policy depends on the amount of cover. They are usually taken for the full value of the property and start at about �25 for �100,000 of cover.

In response to matchmade, I would have preferred to lose the house than be faced with a �25k bill for sorting out the mess the previous owners left.