The nervous wait to exchange....

Skillmister · 2 Mar 2016 at 14:16

Freefaller said:
Our purchase fell through. The vendors did not disclose that the extension had not been signed off by the council's building controls. I phoned the council to check on it, and it required a fair bit of work to make it pass. The vendors were not willing to do it. Furthermore, their solicitors said "It is unfortunate your clients went to the council..." - erm, well I think it's unfortunate you have an underhand solicitor! They were trying to push us to accept the property on indemnity insurance but it would not be covered.

Even offered a further discount on the price - but they wouldn't accept a conditional exchange, on the condition that they sort out the council paperwork / sign off before officially exchanging.

This sucks as we were hoping to beat the stamp duty rises. So we'll either have to aim for a cheaper property, or just accept that our deposit will become smaller owing to have to pay the hike in SD.

We want to rent our flat which has no mortgage, and not willing to sell it. So it's too bad, we'll just have to cough up the cash. When you're already looking at a 5 figure number, and then it basically doubles it is hard to swallow

To be fair you shouldn't have approached the council. It's not your job and tipping them off to work that had been done without permission isn't going to go down well at all!

What about the extension meant it would have taken a lot of work to pass? Was it unsafe?

#Chri5# · 2 Mar 2016 at 14:21

Why wouldn't the indemnity have covered it?

We've just sold a property that an extension that pre-dated our ownership. No paperwork in the slightest and an indemnity policy was enough. My Mum sold before Christmas and was in the same situation - again an indemnity did the job.

Skillmister · 2 Mar 2016 at 14:23

Probably because FF tipped off the council so indemnity is now invalid for him and any future buyer causing the seller a world of hurt

Depends how long it's been up as well, under 12 months is less likely to be covered.

#Chri5# · 2 Mar 2016 at 14:42

Skillmister said:
Probably because FF tipped off the council so indemnity is now invalid for him and any future buyer causing the seller a world of hurt

Depends how long it's been up as well, under 12 months is less likely to be covered.

Ah, sounds like Chancel Repair Liability. If you know there's a liability, you can't insurance against it :confused:

Freefaller · 2 Mar 2016 at 14:44

The planning permission was applied for and granted. It was for 2 stories. Only 1 was built because they ran out of money owing to a divorce or whatever, and the property was being repossessed.

Our IFA wanted information on the extension because the bank wanted to know how old the extension was, as this particular lender had some caveats.

So I needed to find this info, our solicitor was gathering it for us, but I was working in parallel as I was keen to speed this along. I went to the council to find out the details of the planning, and that's when I found out that the planning hadn't been signed off yet. So I thought it was just a case of doing it. As it turns out because it was only 1 story instead of 2 they would have to apply for an amendment to planning permission which again would have been fine - just a bit of procedural stuff a bit of red tape, nothing overly onerous. I think it would have cost the vendors around £170 or so.

However, because it is only 1 story and they haven't applied for an amendment, the 1 story by itself does not conform to building regs, lots of outstanding bits to make it pass building regs.

They were not willing to do any of this work to facilitate the sale. They were being repossessed and wanted a quick sale. We are chain free, and willing to move quick, they were being stubborn, so we pulled out.

My solicitor said that the responsibility is entirely on the vendors, but it just goes back to the old chestnut of "buyer beware". I was aware, and I told them where to shove it.

I was actually tempted to put it out on social media for future prospective buyers to be aware that building regs have not been signed off. We wasted 2 months a fair bit of money (solicitors etc...) that I don't want others to suffer.

Their solicitors were being underhand, dishonest and they were trying to deceive us. **** 'em. 0 poos given if they struggle to sell and they get a black mark on their credit score.

Skillmister · 2 Mar 2016 at 15:18

Sorry mate but you've acted pretty inappropriately there!

You really shouldn't be approaching the Council about anything as a buyer until after exchange of contracts, except maybe things like planning use changes. And putting it on social media, are you serious?!

If people don't want to get planning permission/building regs for work that's skin off their back. I get that in the end it's going to cost you a ton extra in stamp duty but that's still not justified.

It's not just the sellers you're ******* over though. What about the next innocent buyer who comes along, decides to proceed with the benefit of an indemnity policy (as required by their lender) only to come to try and rely on it and find out it's void? You're gonna be costing them a whole lot more than a few grand in stamp duty if they need to get an extension torn down and rebuilt at their own cost!

Freefaller · 2 Mar 2016 at 15:34

Maybe I wasn't clear but indemnity wouldn't cover this according to our solicitor? And they were trying to brush it under the carpet that there was a glaring issue with the planning. Surely that's not right?

I was supposed to type "tempted to" when I said social media. I'm on my phone and it didn't type. I've edited my post. If I had I'd be protecting the next buyer to be aware of issues.

Why shouldn't I go to council? I'm about to invest a lot of money, I want to make sure I'm not going to be screwed over. Our solicitor would have told us to back down anyway. Due diligence it is important.

ZeeWrath · 2 Mar 2016 at 15:35

Surely he was just carrying out due diligence, who else is he supposed to ask if he is not sure whether it has building regs or planning?

Skillmister · 2 Mar 2016 at 15:40

It's not right but that doesn't make it right for you to start enforcing planning and building control issues either

I have a similar issue going on at the moment where a buyer's valuation report has picked up on a planning issue and they went straight to the council to "get things sorted". Queue a crying 80 year old woman in my office saying the council have rung her to say she has to pay £3k for a lawful development certificate or she will have to make alterations to the property. Now, I wouldn't have been sweeping that under the rug but there are other solutions she should have been aware of (and advised on) before the buyer goes poking his nose in.

Freefaller · 2 Mar 2016 at 15:45

I'm not enforcing. I was checking. I then suggested to the vendors via solicitor that if they get it approved we'd buy. The fact is our lender wanted to have the details of the extension, what else was I supposed to do? Wait? I'm too proactive for that.

There were two issues:

The extension wasn't to plan.
What was built didn't pass building regs.

Actually a third,

For the current building to be approved a new application for planning was needed.

They were / are being repossessed and wanted a fast sell. If they had declared that at the beginning we'd have even offered to pay for the council for the planning amendments. However they were being dishonest, and our solicitor has to declare it to our lender which wanted the info on the extension anyway!

Skillmister · 2 Mar 2016 at 15:50

Enforcing/checking doesn't make much difference. Buyers contacting councils is just the done thing especially when things like indemnity are being considered (I know you mentioned it wasn't suitable here but point still stands)

Here'es some wording from a policy:

Are there any significant conditions or exclusions
under this policy?
Full details of conditions and exclusions are detailed in the
policy, but we would draw your attention to the following:
1. You must not enter into negotiation with the local authority or apply for retrospective consent.

3. You, or anyone acting on your behalf, must not:
a. disclose the existence of this policy to any third party other than prospective purchasers, lenders, lessees and their legal advisers without our prior consent

Freefaller · 2 Mar 2016 at 15:57

So what should the process be? How would one be covered for such an issue?

Their solicitor said we'd be covered by indemnity but ours said we wouldn't be.

Skillmister · 2 Mar 2016 at 16:04

If they said you'd be covered they should send your solicitor the policy so he can check it over - they most likely use different providers although conditions are probably similar but it's possible they had one that would cover it. Bespoke ones can cover much more and come at a higher price for a reason.

Freefaller · 2 Mar 2016 at 16:05

Skillmister said:
If they said you'd be covered they should send your solicitor the policy so he can check it over - they most likely use different providers although conditions are probably similar but it's possible they had one that would cover it. Bespoke ones can cover much more and come at a higher price for a reason.

I think this is the issue our solicitor said that it wasn't covered so I guess they must have shared the policy?

Syla5 · 2 Mar 2016 at 16:05

Skillmister said:
You really shouldn't be approaching the Council about anything as a buyer until after exchange of contracts, except maybe things like planning use changes. And putting it on social media, are you serious?!

LOL...ok..

Guys wait until you are contractually obliged to pay thousands of pounds in contract break fees to the vendor who has lied to you about the true state of the property you're buying.

Don't do checks, and happily make purchases without satisfying your own concerns.

Also what difference is there between FF's solicitor, or FF finding out this information other than time taken? From the sounds of it FF's solicitor would have found this out anyway (under his instruction) and the situation is no different for the current vendor.

End of the day FF did nothing wrong and the vendor/vendors solicitors have been dishonest and deceitful, yet you're saying FF has acted inappropriately?

Strong logic.

Skillmister · 2 Mar 2016 at 16:13

Nice selective bolding of my text, if you include "as a buyer" my point is 100% correct. Maybe I should spell it out that I mean directly, personally etc etc...

Syla5 · 2 Mar 2016 at 16:20

Skillmister said:
Nice selective bolding of my text, if you include "as a buyer" my point is 100% correct. Maybe I should spell it out that I mean directly, personally etc etc...

Your post becomes irrelevant though because the same information would still have been found out before any contracts had been exchanged.

I ask again what is the difference between FF being proactive, and waiting a little longer for the exact same outcome to happen via his solicitors finding out the exact same information?

Skillmister · 2 Mar 2016 at 16:23

Because that wasn't necessarily the only outcome but as soon as the council were approached it was.

It's surprising what a little negotiation between solicitors and then a few persuading comments from the seller's solicitor to his client could do to spur them on to get the sale through. Even more so when they have the pressure of repossession or whatever!

Syla5 · 2 Mar 2016 at 16:31

Skillmister said:
Because that wasn't necessarily the only outcome but as soon as the council were approached it was.

It's surprising what a little negotiation between solicitors and then a few persuading comments from the seller's solicitor to his client could do to spur them on to get the sale through. Even more so when they have the pressure of repossession or whatever!

Judging from FF's comments I suspect the same approach to the council would have been made through solicitors anyway, in which case, no change in outcome. The council would have still been made aware, and no matter what communication takes place, the situation is the same.

FF probably still would have pulled out of the deal and the vendor is still just as screwed, all because they tried to cover up the fact that they hadn't followed planning permission, or requested adjustments at the time.

Siliconslave · 3 Mar 2016 at 00:09

the indemnity insurance only covers you for putting right planning and or building regs issues - however if the council makes you pull the extension down, or it falls down on its own it'll do nothing.

The whole 'don't tell the council and they may not check' thing is crazy, the vendor should have know there wasn't any planning / building regs and offered it up front OR made it good - its not too difficult a process IF its been done properly but the fact that they cut corners sticks to high hell so in all honesty your probably better off out of it!

Aren't the SD rizes only with regards to second properties?