New Rules for Metal Boxes in rental properties

[SimonH2]

One interesting thing I came across when looking around this topic is that these 'indemnity insurances' are nearly always invalidated if the policyholder, or anyone associated with them, has ever made an enquiring of the LA regarding LABC approvals.

Indeed - basically "thou shalt not tip off the council (or whoever) about the possibility of something not being right". That's in the policy we have for the extension on our house. As an ex-council house there's a covenant about not building anything without permission from the council "not to be unreasonably withheld". That permission is separate to planning permission and building regs.
Given the number and size of extensions (or even complete new houses) that have gone up locally I'm not too worried about it - but the insurance is there to cover the legal fees should we find ourselves with any problems.
IANAL, but I think it would be an interesting question to ask as to whether planning permission constituted permission from the council in respect of the covenant. It's certainly permission, and it's from a part of the council.

I suppose that makes sense since, if one has made such enquiries, one would then be seeking 'insurance' in relation to something which was a known fact! - i.e. if it is known that work was undertaken without permission (within a timeframe that could lead to an enforcement notice), once cannot insure against the 'possibility' of that being the case!

You may have a known fact (e.g. non-notified work) - but there is still the unknown of whether the council will do anything, or if any action will go further than "apply retrospectively please".

 

[JohnW2]

Indeed - basically "thou shalt not tip off the council (or whoever) about the possibility of something not being right". That's in the policy we have for the extension on our house.

Maybe - but few people are daft enough to ask the LA about Building Regs approval specifically in relation to work for which they know that they didn't apply for approval (or weren't granted approval)! If they made any approach, it would presumably just be a general one, about the 'Building Regs history' of the property in question - in exactly the same way as the buyer's solicitor/conveyance will have asked these questions of the LA during their routine searches - and I don't think any of that constitutes 'tipping off the council'.

You may have a known fact (e.g. non-notified work) - but there is still the unknown of whether the council will do anything, or if any action will go further than "apply retrospectively please".

I'll have to ask my legal offspring when I have a chance, but I do doubt that it is possible (lawful) to have insurance against the possible consequence ('if one gets caught') of a criminal act one has already committed!

As I've said, the simple way around any such legal complications/uncertainty is for the buyer to take out the insurance (and then argue about who is going to pay for it) - since there's nothing wrong, or unusual, about insuring oneself against losses due to someone else's illegal acts.

As I've also said, the 12-month (I think) time limit on issuing enforcement notices seems to make these 'indemnity insurances' essentially useless/unnecessary. Few people will undertake notifiable work immediately before selling a house, and the selling/buying process usually takes months, so it's unlikely that there will be any of that 12 months left by the time the buyer becomes the owner.

Furthermore, I imagine that any potential problems would relate to an undisclosed failure to notify notifiable work - and if the seller has not disclosed that, I imagine that they will already be in an essentially indefensible (contractual) position if anything does 'happen'.

Kind Regards, John

 

[SimonH2]

I'll have to ask my legal offspring when I have a chance, but I do doubt that it is possible (lawful) to have insurance against the possible consequence ('if one gets caught') of a criminal act one has already committed!

That may be true, but even if the vendor is buying it - the insured party is the buyer which probably complicated the discussion a bit.

Furthermore, I imagine that any potential problems would relate to an undisclosed failure to notify notifiable work - and if the seller has not disclosed that, I imagine that they will already be in an essentially indefensible (contractual) position if anything does 'happen'.

Agreed - to a point. As well as the undisclosed and non-notified works - there's works the vendor admits to but can't demonstrate notification & sign off, and as in our case, works that were otherwise all above board but breach a covenant on the property which (AFAIK) has no time limit for action. A quick search suggests that the situation with covenants is "complicated"

 

[JohnW2]

That may be true, but even if the vendor is buying it - the insured party is the buyer which probably complicated the discussion a bit.

Maybe. I'm out of my depth and experience here. With things like Professional Indemnity insurance, it is the policyholder who is insured/indemnified, in relation to the costs of a claim made against them. In practice, I imagine that, in the event of a claim under the policy succeeding, money probably passes directly from the insurer to the person making the claim against the policy holder, but I don't think that alters the fact that it is the policyholder who is being insured against losses, not the person(s) who may make claims against the policyholder. However, things may be different with the property-related indemnity policies such as we are discussing. I don't know.

Agreed - to a point. As well as the undisclosed and non-notified works - there's works the vendor admits to but can't demonstrate notification & sign off...

I'm seeing implications of that (e.g. from eric), but I don't really see how that can arise in relation to Building Regs approvals. As I've said, it seems that information on Building Regs applications and outcomes (including the issuing of Completion Certificates) is readily available, as are 'replacement copies' of Completion Certificates - so I don't really understand how/why one would be "unable to demonstrate notification & sign off" (IF a Completion Certificate had actually been issued!).

Kind Regards, John