Where works to a building are carried out that needed Building Regulation Consent, the general consensus until recently was that, if it was more than twelve months ago, then the Council would not be able to take any enforcement action.
However, a closer look at the law in relation to the time and the different ways that the Council can approach this means that, effectively, the Council can now take enforcement action at any time.
As a result, Building Regulations compliance for all past works has assumed a much greater importance in the conveyancing process. This effect has been magnified by two factors – the creeping expansion of Building Regulations to more and more areas of improvement beyond what was their traditional scope and by the increased urge of twenty first century homeowners to make constant improvements to their homes, especially during lockdown.
It is now a key part of the conveyancer’s job to enquire, when acting on behalf of a buyer, about all the works done in the past which should have had Building Regulations applications and consents and to obtain copies of all the relevant documents from the seller.
It is also reasonably common for a houseowner to obtain consent to do the works and then not to get round to asking the Council to make a final inspection and produce the Final or Completion Certificate to show that the Council is satisfied that the works have complied with the regulations and any specific terms of the consent. The final step of having the actual work `signed off’ as complete is missed and Covid lockdowns have just exacerbated that problem.
When, as quite often happens in a purchase, works have been done in the past apparently without the required Building Regulations consent and certificate, the solution is normally for the buyer to require the seller to pay for a Building Regulations Indemnity policy. This covers most works done in the past without the requisite consents but only in relation to costs against any potential enforcement action – it does not confirm that the works undertaken where of a reasonable standard or have been carried out safely. You also have to wait for a little while before you can put the policy in place – typically three months to four years, depending on the nature of the works.
The premium is paid upfront and is a one off. Once the policy has commenced it, usually, lasts indefinitely, effectively “forever” and there are no renewal premiums. The cover is usually up to the value of the Property. This can usually be increased as the Property price increases for a small fee (but it is not compulsory to do so as part of the policy). The conveyancer acting on any sale would be able to put this policy in place if it is possible to take one out as part of the usual selling process. However, each circumstance is unique and you will need to talk to the conveyancer acting for you on any sale to make sure that any policy taken out is appropriate and will be valid. We are not able to do this outside our usual conveyancing work for our clients.
The one-off premium is usually not substantial and is based on the value of the property. For a house worth half a million pounds, it is likely to be less than two hundred pounds for a Building Regulations policy so it is not a huge cost. The insurance companies have obviously calculated actuarily that the risk is so small that they will pay out on only a tiny percentage of 1% of the huge volumes of indemnity policies taken out each year for breaches of Building Regulations (or many other problems encountered in conveyancing which can also be covered by indemnity policies).
It is important that the buyer on hearing of a Building Regulations issue does not on his or her own initiative contact the Council to discuss the matter – that could prevent any policy being taken out or it being effective. Worse still, if the buyer withdraws after discussing the matter with the Council, he or she could have left the seller with a problem if the Council, having been alerted to the breach, decides to take enforcement action as it is now alerted to an issue that it might otherwise have been completely unaware of.
It is important to realise that the policy is not a magic wand to solve all problems. It would not stop the Council from taking enforcement action – although such action by a local council is rare. If it did occur, the insurers would probably seek to negotiate with the Council; and if the Council was adamant that the work must be undone or expensive remedial work must be carried out then the policy would normally cover the cost of this work. These policies are very useful because they provide a significant degree of reassurance and help the conveyancing process to proceed. However, remember, they do not guarantee the quality of the work or offer any protection if the works are not appropriate, safe or defective.
This article was prepared by Alexandra Croft, a Solicitor that works in the Property department at WBW’s Sidmouth office. If you would like to contact her to discuss anything mentioned in this article or for any property-related query, please call her on 01395 517939 or email [email protected].
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.