Discuss how to deal with property “legal defects” with your conveyancer
Updated: 16th Apr, 2024
Author: Charlotte Burton
Your conveyancer may find that the seller doesn’t have key certificates they are meant to give you, or has made changes to the property without getting proper planning permission. Fixing the underlying problem may take a lot of time or money. Your conveyancer will give you guidance on what is best to do, but below are some explanations of possible solutions.
🩹 Short-term solution
In these types of scenarios, you can get something called indemnity insurance as a “sticking plaster”. This insurance covers the financial losses you would have to pay if you were taken to court in the future because of the unaddressed problem. The insurance does not cover the cost of fixing the problem itself, only the cost of the legal fees & potential damages due to being in the wrong of being taken to court. It is a one-off payment that covers multiple years.
If you plan to fix the problem as soon as you own the property, you may want to negotiate down the sales price to cover this cost instead. If you don’t plan to ever fix the problem, indemnity insurance can be a good idea. Your conveyancer can advise you on what is best to do.
- If the seller has done something wrong, like not getting the correct planning permission before making an alteration, they would generally be expected to pay for this indemnity insurance & transfer it to you.
- If the situation is less clear, e.g. if you have to cross someone else’s land to reach the property and the “right of easement” to cross this land has never been officially granted for many years, it may be up for debate who would pay for the indemnity insurance.
📅 Long-term solution
In the long-term, it’s generally better to fix the underlying problem rather than hope no one notices, & have indemnity insurance to cover legal costs in case they do. Bear in mind that indemnity insurance is often invalidated as soon as you reveal the problem - eg if you apply for retrospective planning permission.
Examples of when indemnity insurance could be useful:
- Missing planning permission or building regulation approvals for an alteration that the seller made
- Missing FENSA certificates for windows or doors installed after 2002
- Absence of a right of way
- Absence of a freeholder, if the property is leasehold
- Potential chancel repair liability (if the property owner is liable for church repairs of a nearby church)
- Breach of “restrictive covenants” in the title deed. Eg, the title deed could state that the owner couldn’t build an extension, and yet a previous owner has
