indemnity insurance

[pearles]

We are selling our house, and have been asked to provide a copy of a conveyance from 1968, which we don't have and have been asked to provide indemnity insurance, at our expense, if we don't have it. What is this? Also, we've been asked for proof of planning permission, building regs consent and completion certificate for the building of a porch, but as the porch was already here when we came we don't have this.My solicitor says indemnity ins would also cover this, but what would it involve?

[Eve]

An indemnity policy is an insurance policy which is put into place for a one off premium (usually based on the indemnity limit depending on the risk) and provides an indemnity fund in certain circumstances for the insured to use to help with problems which may arise.

They often have conditions attached and certain actions can void the policy so best to check with your solicitor before making any enquiries. If for a valid reason then it is usual for the seller to cover the cost.

A conveyance is a sale document which, if unregistered could be part of the proof of chain of ownership and whether the property is registered or unregistered at the land registry could provide info about the land such as restrictions (eg covenants) so it is covering the risk of the unknown in a sense.

For example if the buyer wanted to do something with the property such as use it for a business which the missing document does not allow then the person with the benefit of the covenant could try and enforce it.

It is common in a property purchase to check the planning history as if works have been carried out which require planning permission but for which there is none then the planning dept could in certain circs ask for the unauthorised works to be taken down.

Questions to ask yor solicitor could be was this looked into when you bought, have the deeds been checked in case they are with them, is there any evidence of consent being obtained on the local search obtained by the buyer?

[Eve]

It may also be worth checking whether planning consent would have been needed for the porch and whether it comes within permitted development rights. The council may be able to advise BUT certain approaches to third parties can void the policy.

Think of it from an insurers point of view, if say someone approached the council for info which then tipped them off about possible unauthorised work then they could take action and the policy could be void as you are putting the insurer at an increased risk of having to pay out.

Indemnity policies are becoming increasingly common these days as a band aid remedy for problems but all relevant parties should be made aware of the relevant terms and conditions and especially restrictions of the policies. They will also need to be approved by the buyer's lender if there is one.

Your solictor should be able to provide you with a copy of the sample policy wordings if you want to have a read.

It is usual for the premium (sum payable for the policy) to form an "allowance" on completion so that less money is transferred to compensate. The policy is then put "on risk" ie into force on completion.

Hope this makes sense and helps :)

[themas]

Assuming you have lived there more than 4 years, the request for planning permission documents is unnecessary as the local authority could not take enforcement action after that time. The request for a completion certificate seems like a nit picking action - surely the buyer (or their surveyor) only has to look at it to decide whether it is complete. I'm not sure whether building regs. consent would be needed for a porch - if so this might be a bit more of a problem.

[buildersmate]

Building Regs consent is never needed for a porch because it isn't habitable space. And it is rare that Planning Permission is needed because Permitted Development rights can normally be used. Our solicitor should know this. Completion Certificates come at the end of a project which needed Building Regs approval.