Are you thinking of buying a property but are concerned that alterations have been made to it without the appropriate Local Authority Building Regulations Approval? Our Property Law Specialists at AMD Solicitors look at the issues.
Building works carried out to a property must comply with certain standards to ensure that they are safe and energy efficient. Unfortunately, it is quite common to discover that building works have been carried out without the necessary Building Control Consent having been obtained.
The reasons for this vary but range from ignorance of the law to a deliberate decision not to apply for consent where it is clear that Building Regulation Approval would not have been granted for the works.
Our team of Property Lawyers in Bristol can help clients evaluate the risks that are involved where Building Control Consent has not been obtained for works and advise clients who are in the process of purchasing a property on the available options.
The sort of works requiring approval
The regulations are fairly complex but broadly:-
a) Any work of a structural nature eg the removal of a load bearing wall or chimney breast, the construction of an extension or in some cases a conservatory would all require Building Regulation Consent.
b) In addition, Building Regulations have, in recent years, been extended to cover home improvements such as gas and electrical installations and replacement hot water tanks and replacement windows. In these cases, a Building Regulations Compliance Certificate can be issued by a qualified contractor confirming that the works were completed to the required standard.
Our team of Property Lawyers can advise our clients of the circumstances where Building Regulations would be required. It is therefore important that you or your surveyor make us aware of any works that may have been carried out on the property so that we can make the necessary enquiries of the seller. The seller should also disclose any works undertaken at the property in the information supplied to you prior to purchase.
What if there is no Building Regulation Approval for the works undertaken?
A Local Authority can take enforcement action against the owner of a property (even if that person did not undertake the work themselves), requiring the property owner either to undo the works undertaken or to carry out rectification works in order to ensure that the works comply with Building Regulations.
Should you choose to proceed with the purchase of the property despite the lack of Building Regulation Consent you will be exposed to the following risks:-
a) An insurance company may refuse to pay out under a Buildings Insurance Policy if there is inadequate Building Regulation Consent for alterations to the property.
b) If there is no Building Regulation Approval for the works, they could be structurally dangerous.
c) The Council could take enforcement action against you requiring you to undertake costly rectification works and causing you the considerable inconvenience.
d) If you are a cash buyer you can choose to take on these risks but, if you are buying with a mortgage, we will need to report the facts to your mortgage lender and the bank will almost certainly require some form of further protection from the risks.
What can I do to protect myself against the risks?
a) The best solution for you may be to ask the seller to apply for retrospective Building Regulation Consent from the Local Authority. A building inspector will need to come out to the property to inspect the work and if they are satisfied that it complies with Building Regulations they will issue a “Regularisation Certificate”. In many cases, the building inspector may only be able to undertake a limited inspection so you may not receive full approval but only confirmation from the Building Control Department that they will not take enforcement action. You will still need to rely on your surveyor’s advice regarding the quality and standard of the work undertaken. A seller may be reluctant to apply to the Council for Retrospective Consent on the basis that it could open up “a can of worms” if the Council decides that the work carried out does not comply with the Regulations and remedial works are required in order for it to do so. Furthermore, by contacting the Council the seller would not subsequently be able to take out an Indemnity Insurance Policy (as referred to below).
b) Currently, the most common way to deal with a non-compliance issue is to take out a Lack of Building Regulation Consent Indemnity Insurance Policy. We can request that the seller’s solicitor obtains at the seller’s expense a policy to provide cover for the owner against the cost of any expenses or losses resulting from the Local Authority taking enforcement action against them. The Indemnity Policy route will be quicker (policies can be taken out online and put on risk immediately) and may well be cheaper than requesting Retrospective Consent.
Are Indemnity Policies the complete answer?
There are some significant problems with relying on an Indemnity Insurance Policy and before choosing this option you should be aware of the following:-
1. The Policy will only provide cover for costs and losses suffered by the property owner as a result of enforcement action being taken by the Council. They will not provide any form of guarantee for the quality of the works and will not cover losses resulting from any defects in the works.
2. Insurer’s terms will vary but they usually include:-
a) That if consent for the works has already been refused by the Council then the Policy is invalid.
b) The cover may only be in respect of “enforcement” action and may not cover other investigation works required.
c) The Policy will usually only cover works over 12 months old.
d) The Policy will be invalid if any contact is made to the Council regarding the works thereby alerting them to the lack of Building Regulation Consent.
e) If the homeowner applies for Building Regulation Consent for further works at the property the Policy could be invalidated unless consent is first sought from the insurer.
f) Most policies will ask the insured to confirm that there has been a survey carried out on the property and that this did not require any corrective works to be undertaken at the property with regard to the works covered by the Policy.
Choosing to buy a property where there is evidence of a lack of Building Regulation Consent requires careful consideration of the options available and an understanding of the limitations and risks of the so-called solutions.
Buying and selling a property can be a complex and sometimes stressful experience. Our experienced Conveyancing Team at AMD Solicitors can advise you on the issues you may encounter when you are buying or selling a property and guide you through the process so that you can have peace of mind.
If you would like to instruct us in the process of buying or selling your property, please contact us by emailing firstname.lastname@example.org or, to obtain a costs estimate, please call our Conveyancing Team 0117 962 1205.
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