Selling my house without building regulations what can I do?
I'm in the process of selling my house. The buyer's solicitors are hung up on the extension which was put in by the previous owners. There aren't any building regulations certificates from when we moved in. What can I do to speed things up?
On completion of any structural works or works which involve changing of pipes or services, a house owner should obtain a completion certificate confirming the works have been carried out to the required standard from the Building Regulation Department of the local council. In order to obtain this certificate, the relevant inspector needs to have been notified before the works start and will inspect at the beginning and during the course of the works. Building regulation requirements do change over the course of the years and with works that were carried out a long time ago, say 20 years, you often find completion certificates were not even issued at that time.
If the works have been in place for some time but there is no completion certificate this does not mean the work is not up to standard, but it does mean the correct procedure was not followed. However, the building regulation officer would be unable to grant a certificate in retrospect because they have to inspect from the very beginning.
In order to get round this problem, either you or the buyer can obtain building regulation indemnity insurance which will pay out in the event that the works have not been carried out correctly. The cost of the indemnity insurance is directly linked to the cost of the house. For example, if a house is being sold for £500,000, the cost for a very straight-forward policy is £175. It is up for negotiation who pays this cost and is the quickest way of dealing with the problem. You normally obtain indemnity insurance via your conveyancing solicitor
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However, the policies become invalid if anyone makes an approach to the local council to ask about a lack of a building regulation certificate, therefore on no account should the local council be notified or contacted, since to do so will cause a far greater problem. I am afraid it is another potential cost in the buying and selling process.
In terms of building regulation compliance, the reality is that the council have to take action within 12 months of the work being completed, although it is open to them to serve a dangerous structure notice at any time if there is reason to. Otherwise, if a council issued a notice for lack of building regulations after the 12 month period it could be rebutted.
In terms of the indemnity policies, frankly they are a sop to the building societies because you cannot take them out until after the 12 month period. What they cover is the position you would be in if the local authority take enforcement proceedings, which the they cannot do unless the structure is dangerous. If, however, a purchaser were to approach the local authority about work where there was no completion certificate, then the authority could come and inspect. In order to grant a certificate, they would have to check the work had been done correctly, which would mean dismantling everything as they check from foundations upwards. This is why an indemnity policy will not be granted if any approach has been made to the local authority.
It is now standard practise to ask for an indemnity policy if there is no completion certificate and mortgagees solicitors will ask for them routinely, even if they really are not worth the paper they are written on. As a seller, if you are asked for one you can resist for the above reasons but as with everything it will depend on who wants the deal to go through more. The price of the policy is always linked to the price of the house; the higher the price, the higher the price of the policy.
In terms of the buyer’s comfort, if they have a proper survey carried out, which I always recommend, and a separate gas and electric test, then this should give them an idea of if the fabric of the house is in a good condition or what work is needed to rectify a problem. However, the other point about these policies at the moment is that you have to look at resale. You may find that at the point of resale, especially if the housing market is weak, that a buyer will insist on a policy which is likely to be more expensive, because hopefully at that point, the value of your property has gone up.
Answered by Gillian White from White & Co solicitors