Our firm is both authorised and regulated by the Solicitors Regulation Authority and the registration
number is 00070079
Residential Fees Explained
CONVEYANCING FEES
We have our members of the team who may work on your matter be it a purchase or sale of a freehold or leasehold title or re-mortgage. Regardless of who works on your matter, they will be supervised by Leslie Conway and Linda Conway.
Leslie Conway is the head of our conveyancing team and has over 25 years' experience in private client work, specialising in Conveyancing and is a qualified solicitor.
Linda Conway is the principal residential conveyancing manager overseeing all the conveyancing transactions with an experience of over 25 years in the field and CQS accredited. Conway & Co. is registered with the Conveyancing Quality Scheme
Scope of Work
At the outset of your transaction, we will agree with you the scope of the work required. This will include identifying your objectives, giving you a clear explanation of the issues involved and the options available to you. We will agree with you the next steps to be taken and keep you informed of progress. We are qualified to give legal advice only. We are not responsible for matters that are outside the scope of the work agreed, or that would not normally be considered part of a solicitor’s duty in relation to that work.
We wish it to be clear that we do not provide tax or financial advice. Similarly, we are not able to provide advice on matters of survey although we strongly recommend that you have your purchase property professionally surveyed before you commit yourself to a Contract.
Please note that Conway & Co. will not act for separate parties to a transaction where there is a potential for a conflict situation (for example, two relatives from the same family selling one to another or a situation where an elderly relative is contributing to the purchase price in return for assisted accommodation or even if you are selling as a company to yourself as an individual). Therefore, if the other party to your transaction is a relative or family member, you must advise us at once as it may well transpire that one of you will need to appoint an independent solicitor to act. It is your responsibility to advise us if such circumstances do, or may apply, in your individual matter.
A broad outline of our work for a purchase is:
Obtaining information from your Sellers Solicitors
Checking that the Sellers have a good title.
Making enquiries of the Seller
Agreeing the terms of the Contract
A broad outline of our work for a sale is:
Drafting the contract and preparing the conveyancing package in accordance with the Conveyancing Quality Scheme of which we are members
Dealing with enquiries of the buyers solicitors
Agreeing terms of the transfer
It is important to note that we will not normally have viewed the property or its surrounded land. We will not necessarily be familiar with local areas, roads or practices (such as parking). If you have any particular concerns (and you will normally have been to the property more than once) please raise these with us early in the transaction as possible.
Once we are satisfied that all matters have been property dealt with, reporting to you with the Contract for signature
Obtaining the deposit
Agreeing a completion date exchanging contracts. It is at this stage that you become committed to the purchase.
We will also calculate any additional monies required from you
Arrange to complete your purchase
Following completion we will deal with the Inland Revenue and Land Registry formalities and upon completion of the registration we will provide a copy of your title.
Please note for the avoidance of doubt that Conway & Co., has no actual implied or assumed duty to advise you on which property to purchase, the price to pay, the suitability of your lending arrangements, or any due diligence carried out on prospective purchasers to establish their ability to pay. This is purely commercial advice that falls outside the ordinary scope and duty of solicitor advice.
It is nigh on impossible to predict how long a Conveyancing transaction will take. There are so many factors that affect timescales of a transaction. These include the length of the chain, the speed that Solicitors acting for the other side can obtain information, the speed of other parties in the transaction dealing with enquiries and the ability of other parties in the transaction obtaining their mortgage offers. The factors referred to above are not an exhaustive list.
It is for this reason that a Conveyancing transaction could take as little as a few days or as long as four to six months or more. We can aim to exchange or complete as per your instructions on an agreed date at the outset or early on in the transaction. However you must be aware that given the number of variables involved in a Conveyancing transaction we cannot guarantee that this date will be met. As such we cannot be held accountable for any delays.
We will keep you updated in respect of timescales and when we have more information we will let you know the reasonable estimated timescales for your matter. As the transaction progresses we should be able to give you more accurate timescale estimates. Equally, we expect you to keep us duly informed of timescales and any information that you are aware that will affect your timescales. You must ensure that you keep regular contact with your mortgage provider estate agent seller removal company and any other relevant party and keep us informed.
We do not work on fixed price fees. We provide estimated fees our firm will charge for the work on obtaining the information of the transaction from you first. All our estimated fees are exclusive of Vat. Vat is charged at the prevailing rate of 20%. Stamp Duty and Land Registry fees do not attract Vat.
Where we have given you estimated fees and circumstances apply for additional costs then we will give you a revised estimate of our fees to include the additional work involved as necessary. The hourly rate for our senior partner is £350.00 per hour plus Vat and our senior conveyancing executive is £225.00 plus Vat per hour.
Please be aware that in addition to the solicitors legal fees you shall also have to pay out searches disbursements such as bank charges which attract Vat and others such as Land Registry Office Copies and Postages which do not attract Vat.
As a general guide for a purchase the disbursements are as follows:-
In order to discharge our duty to you and to your lender (if you have one) we are required to ensure that you obtain good title to the property, and before committing you to the purchase or the lender to the loan ensuing that you are both made aware of any problems or potential problems that could affect your decision to proceed with the purchase of the mortgage lender’s decision to proceed with the mortgage or re-mortgage. To this end, we may commission such search package as is appropriate to the property in will include:
Local authority or personal search
Environmental Search
Chancel search
Water Search
Until such time as we have had an opportunity of viewing the title and the searches provided, we are unable to say, at this stage, precisely what searches would be appropriate for your particular property and whether or not any searches provided are acceptable and current.
For the above full basic search package we will charge £650.00 inclusive of vat but this again varies from property to property. This does not include our professional charges and administration fees in reviewing the searches and advising you of their content. The search package fee will be billed separately.
Please not that there are occasions when area specific searches are required. For example a Tin Mining Search if the property is in Cornwall or a Coal Mining Search if the property is in a coal mining area past or present. Where area specific searches are required you will be advised of the additional fees to the basic package which you will have to pay and again these fees do not include our professional charges and administration fees in reviewing the searches and advising you of their content. The search fee will again be billed separately.
Please also note that there are situations where a Commons Registration search would be advisable and if so we will advise you of any additional fees.
Please be advised that it is our policy to carry out where appropriate a Local Authority Search as opposed to a Personal Search and the basic package provided above is a good value for money not only because it includes the fee charged by the Local Authority to a maximum of £225.00 inclusive of Vat. You will be advised if the Local Authority sum exceeds this amount in which case you will be requested to pay the difference.
Example - The costs vary from Council to Council and between whether a standard search is required or whether there is a need for additional enquiries. For example as search with RBKC is currently £276.00 the CON29R and £27.50 for LLC1 and additional parcels £44.00, £32.00 extra for a hard copy and so on. For South Oxfordshire the standard is currently £182.00 and £30.00 for each additional enquiry and a CON 29 enquiry is £41.00. (These prices are for illustration purposes only and may not be accurate.)
It is possible to carry out a personal search as opposed to a local authority search, but, as a norm it is not something that we recommend. Normally a personal search is cheaper than the local authority search but the replies given to such a search are not guaranteed by the local authority and such search is normally only backed with an insurance. That insurance is activated in the event that the answers given are not correct which as a result you suffer loss or a reduction in the value of the property. The reason why in our opinion a personal search is not viable, is not only because these answers are not guaranteed by the local authority but also there are lenders which refuse to accept personal searches and insist on a local authority search.
It is not possible to provide a definitive list of the Mortgage Lenders that do not accept personal searches as this fluctuates on a very regular basis. If you wish us to check the search status with your particular Lender please notify us immediately and we will arrange to access the lenders online Handbook to ascertain its current requirements. These requirements however are subject to change even during the process of purchasing your property.
All our searches which are carried out through our unit provider are subject to VAT at the prevailing rate.
Search Validation Insurance
Search Validation Insurance will cover both you and your Lender in the event of any loss resultant on an adverse entry being revealed had a fresh Local Authority Search been carried out before the purchase / new Mortgage completed. You will still be bound by that entry but, at least, the Insurance will provide a form of compensation should the risk be realised. We can advise you, if the insurance required or is appropriate in your particular circumstances and the costs.
Indemnity Insurance
There are occasions when problems arise with the lenders requirements due to a defect in the title or perhaps the lack of the requisite planning and building consents for an extension. In some circumstances it is possible to overcome the difficulty or reduce the risk by the purchase of indemnity insurance cover. Again we can advise you, if the insurance required or is appropriate in your particular circumstances and the costs.
Land Registry searches - £3.00 � for exact price please contact HMLR- at present they do not attract VAT
Bankruptcy Searches - £2.00 � for exact price please contact HMLR � at present they do not attract VAT
Telegraphic Transfer fee generally at £45.00 plus VAT
Land Registry Fees
Amount or value
All Other Fee
£0 - £80,000
£45
£80,001 - £100,000
£95
£100,001 - £200,000
£230
£200,001 - £500,000
£330
£500,001 - £1,000,000
£655
£1,000,001 and over
£1015
There is no Vat and these charges are for standard residential freehold registrations. There are other fees full details of which can be found on the Land Registry Portal
These fees are for guidance and subject to change and verification of the current prices are to be obtained from the HMLR official web-site. There will be an administration charge in dealing with the Land Registry depending on the nature of the registration which is generally between half and the full land registry fee payable which is subject to VAT
Stamp Duty
For the exact rates payable depending on your circumstances you should refer to the stamp duty calculator provided on the HMRC government website. Owing to the continuous legislation changes we cannot give you an estimate as to what is the actual stamp duty payable. The fact that HMRC has supplied us with a stamp duty certificate confirming payment does not mean that there will not be a further stamp duty liability on your transaction. You will be personally liable for any additional stamp duty that is due by the Inland Revenue. Conway & Co. is simply acting as your agent and will not be held liable for any additional stamp duty payable. If there is any additional stamp duty it will be payable and be your personal responsibility to discharge either on completion or at any future date as and when determined by HMRC. Conway & Co’s duty is to obtain a certificate in order to facilitate the registration of the property on your behalf and your lender. You will be responsible for any legal fees incurred in obtaining this certificate and there is an administration charge of £125.00 plus vat in dealing with this on your behalf. Whether or not the correct stamp duty has been paid and any stamp duty, additional stamp duty, penalties/losses if the correct sum has not been paid by Conway & Co. is a matter between yourself and HMRC. Conway & Co. accepts no liability of whatever nature. Just as your income tax ultimately any stamp duty payable on your transaction is a matter between yourself and HMRC.
We will not regulate on your behalf, it is your personal responsibility to HMRC and if in doubt you have to contact HMRC direct and/or seek a financial accountant’s advice.
On the day of completion funds will be despatched to the Seller’s Solicitors by way of telegraphic transfer. Our bank currently charges us a small fee for this service. However, the responsibility for processing the instruction to the Bank rests with this firm and involves the active participation of at least two members of Staff and accounts to ensure and verify for security purposes, the accuracy of the details provided for the receiving bank; that the amount being transmitted is the exact amount required to complete and that sufficient funds are already within the system to enable onward transmission of the completion monies.
If there is any error in either the bank details or the amount transmitted, completion will fail and you will become liable for all interest and losses the Seller incurs as a result of your default. If you are involved in a chain of transactions, then you will be responsible for all losses incurred. This could involve a substantial amount of money where several sales and purchases are disrupted resulting in bank charges removal costs and hotel expenses legal fees interest and incidentals.
In order to cover the time and administration involved in this process, we will make a charge of £45.00 plus vat for each telegraphic transfer sent within the completion process. This relates only to monies sent in England and Wales. Different charges apply to international transfers and in those circumstances you will be advised separately if applicable. Any fee charged to us by our bank will be absorbed within the charge we make to you. Where funds are received by telegraphic transfer or bacs each transfer will attract an administration fee of £20.00 plus vat. Please note that we have no control over the banking central systems and can take no responsibility for delays occurring or if the system does not operate. In such circumstances it is very likely that you will become liable for all interest and losses the Seller incurs.
Mortgages and other additional work
The estimate of fees given above is given purely for acting on your behalf and will not normally include additional work required for acting on behalf of any Lender in the registration of a new mortgage or redemption of existing mortgages. If applicable, this additional work will include receiving Mortgage Instructions from your Lender and ensuring all Mortgage conditions have been met before exchange of Contracts takes place. Following exchange, making application for and obtaining your Mortgage Advance. This firm is on the panel of a number of Lending Institutions who may or may not choose to instruct us to act for them. In the event that this firm is so instructed, then our fees for doing so will be borne by you.
There may also be additional costs and charges incurred if the property you are purchasing is an unregistered title or you are involved in buying leasehold property. In particular, in relation to obtaining information from the Landlord/Managing Agent, service of required Notices on the Landlord and dealing with any necessary transfer of Management Company shares on completion.
Similarly, some freehold properties are subject to a service charge levied to cover the upkeep of amenity areas and recreational areas in the surrounding neighbourhood maintained by the original freeholder or a management scheme arising because the houses were originally let on long leases and contributions for the services were originally made by the lessees. There may be additional costs and charges incurred for obtaining the relevant information and dealing with any required notification of the change of ownership.
If any of the above circumstances apply or additional cost/work becomes necessary then we will let you know within two weeks of becoming aware of the situation. For example issue of instructions from Lenders or receipt of Lease documentation. We will give you a written revised estimate of our fees to include the additional work involved.
For illustration our fees for each of these that apply are usually between £250.00 to £425.00 plus vat. Please note that this is an estimate of our fees and not a quotation. We will try to keep you fully advised if events occur which result in a revision of the estimate.
If you require a retention additional work will arise after completion in relation to diarising and dealing with your sellers solicitors and the Managing Agents regarding progress in the production of year end accounts obtaining your authority and releasing the retention obtaining payment of the sellers share of the excess service charge and advising you of resolution of the matter. Our additional fees for dealing with the same will normally be £450.00 plus vat.
Should you instruct us to agree a completion date that is 10 working days or less from exchange of contracts and complete on the same day we will make an additional charge for doing so. That additional charge will be £150.00 plus vat for each transaction because the shortened timescale will involve your transaction being prioritised during this time.
In the course of the purchase process various small fees are incurred. Some have been listed above. Where a mortgage is involved Bankruptcy Searches will have to be carried out and on occasion it may be necessary to obtain an official copy of any entries registered so that we can ensure that these do not relate to you. In all cases Land Registry Searches are required. The Land Registry Search gives you a limited priority period and it is often necessary for us to renew these searches to ensure priority is maintained until your registration is complete. You have been provided with an illustration of these charges and these will be advised to you before completion and included in our final account to you.
Other charges can apply if a deed of covenant share certificate or insurance is required or even a company search. We will advise you as soon as we become aware that this additional work will be required.
Where this firm incurs fees on your behalf these are referred to as “disbursements” A disbursement is a charge made by a third party for the provision of a service of some kind. An example of a disbursement would be the charge made by HM Land Registry to register you as the new owner of the property following completion of your purchase. Disbursements are not included within the firm’s bill of costs but are individually detailed in a separate statement sent to you on or about the time you are due to complete.
IMPORTANT POINTS TO BE AWARE OF
Abortive Transactions
Should the transaction fail to proceed to completion then this firms charges for the abortive work will be calculated on a pro rate basis depended upon the stage the transaction has reached at the time we are instructed to proceed. The bill will include vat and disbursements.
Billing Arrangements
Our fees are payable on or before completion.
Payments on Account
We may ask you to pay sums of money from time to time on account of the charges and expenses which we anticipate will be incurred in the following weeks or months. This helps us to avoid delay in the progress of your case and helps you to spread payments and budget for costs more effectively.
Before we start work on your case we will require £650.00 inclusive of VAT or such other advisory sum towards our charges and any payments of expenses we have identified.
Payments made on account during the course of the matter will be offset against your final bill and it is important to understand that your total charges may be greater than any advance payments made.
Billing arrangements
We will send a bill before completion.
We will offset monies we hold on your behalf on account of fees and expenses, towards any outstanding invoice.
Payment is due as soon as a bill is rendered and interest will be charged on any bill outstanding of over 30 days. If you do not pay our bill within this time, we are entitled to and you consent to as part of this agreement:
Charge you interest on the overdue amount (at the rate of at least 8% over Natwest base rate)
Recover our costs incurred in collecting the over due amount and even ask the Court to make a charging order over your property to the value of our debt.
Do no further work for you until we are paid in full or not continue to act for you at all (even if that causes you financial loss or distress).
Keep all your papers or other property we hold until we are paid in full.
If you have a query about your bill
You should contact your fee earner straight away on receipt. We aim to work on the basis that no bill should come as a surprise to you. If after speaking to your fee earner wish to complain about any aspect of our bill then you should contact Leslie Conway under the firm’s complaint procedure. In limited circumstances you can apply to the Court for an assessment of our bill.
Payment by Debit or Credit Card
We accept both Credit and Debit card payments if you wish to pay your bills this way,
Debit or Credit cards will not be accepted for payment of deposits or completion monies on Conveyancing transactions but will be accepted for the payment of disbursements.
Other party's charges and expenses
It is important that you understand that whatever the outcome of your case, the responsibility for paying our bills and expenses rests with you, does any sums you agree or are ordered to pay to another party.
SCHEDULE
Searches
Unless your Mortgage Lender is one of the few Institutions that does not accept personal searches, Conway and Co. will, in most cases carry out personal searches via a Search Agent who is fully insured. We are able to offer package options but the following option will be the most usual:-
Personal Local Authority Search
Local Authorities hold registers for individual properties within their boundary. The Register provides details of any registrations relating to the property. The Search will show any planning history for the property and whether any enforcement proceedings have been taken or are contemplated.
The Search will confirm whether or not the property fronts a public highway or whether the road is private or un adopted. If there are any road schemes planned or proposed, the Search should reveal this. For example, if the property you are purchasing fronts a private road, the Search will indicate whether or not the Council has resolved to have the road made up and adopted – in which case, you would be responsible for the cost of that “making up”.
The Search will also give details of any policy provisions the Local Authority may have for the area in which property is situate – for example, an area where only specific types of development would be allowed.
The Search should reveal any “adverse” entries that may affect the property or your decision to purchase it.
Drainage and Water Search
The search will confirm whether or not the property drains to a public sewer and, if so, how the connection is made. From 1st October 2011 only the part of the drain that runs from the building to the edge of its curtilage and serves solely that property has remained private. All combined drains (i.e. all drains which run through the land and serve another property or other properties in addition to the property you are buying) and all single drains lying between the edge of the curtilage and the main sewer in the road became public sewers. You will be responsible for the cost of repair and of a drain not shared with anyone else and lying within the curtilage of your property. Where part of a single drain runs across other land you are buying but which is not considered to be part of the curtilage of the property then the part of the drain is now a public sewer.
While the search should indicate whether or not there is a public sewer running within the boundary of the property, some water companies could take up to ten years to update their records so that a drainage search in the meantime may not be entirely accurate depending upon the drainage system serving the property.
If you intend to develop or extend the property, information regarding the drainage system for the property could be important. Any extension or development within three metres of a public sewer requires a Build Over Agreement which would be at your expense, assuming the Water Authority would agree to one. The Water Authority would have the power to require you to reroute the public sewer at your own expense which could cost thousands of pounds.
If the property has private drainage (cesspit or septic tank) and there is a public sewer within 100 metres of the property, the Water Authority can force you to connect to that public sewer. You will personally have to pay the cost of that connection.
Chancel Liability Search
Liability for Chancel repair is a legal leftover from the middle ages which allows certain parishes to require a landowner to fund repairs to the local church. In 2003, Chancel Liability made rather a dramatic reappearance in the Walbank case when the Parish Church of Aston Cantlow in Warwickshire demanded a little over £95,000 from a house owner in respect of repair work carried out to the local Church. The case went as far as the House of Lords who found in favour of the Church. The landowner received a bill for legal costs in excess of £200,000. There have, since then, been a few further high profile cases in which the Church has again been successful.
Chancel Repair is an overriding interest that affects your land without being registered against the title. Following the Wallbank case in 2003, the Church now has until 2013 to register its interests against the individual properties involved or the right is lost. In the interim however, there is the risk that a large number of claims could be issued before the deadline expires.
As a matter of routine, unless instructed otherwise, this firm will carry out a Chancel Search in all purchase transactions as a surprisingly substantial number of searches are returned with a positive result. This does not mean that a demand will be issued but does identify whether or not a risk exists.
If your search is positive, we can, for a one off premium, obtain indemnity insurance which will act as a form of safety net in the event a claim is made against you. The premium will depend on the level and type of cover taken and this is a matter that you can discuss with your Conveyancer in due course. We would strongly advise you to obtain indemnity insurance that covers you, your Lender and any successors in title.
Commons Registration Search
The Search will reveal whether any part of your property is registered as “common land” or is on the Register of Town or Village Greens. This can affect your vehicular access and, in some cases, prevent the land being developed.
Groundsure Homebuyers Environmental Search
Land contamination has become an issue over recent years and, where land is contaminated, the house owner is responsible for the clean up costs which could run into several thousand pounds. On occasion, the problem has not arisen with the property itself but the containment has leeched from other sources. An environment search will reveal the previous land use and any potential contaminative uses with the immediate vicinity.
We would normally expect to undertake this search on your behalf as it is of vital importance to establish that there is no evidence of contamination. The owner of the property at the time the contamination is discovered is responsible in law for the cost of cleaning the land which could run to many thousands of pounds.
The Search will also give an indication of any propensity to flooding.
The related Groundsure Planning search will give further information relating to the area in which the property is situate including, for example, any current or proposed planning applications within a 250m radius and a general overview of the area.
There are other options available which may depend on the size of the plot being purchased and/or specific client requirements. Please tell us, in writing, of any plans you have for the property as this may well affect our advice.
Full Local Authority paper search
If you are purchasing with the aid of a Mortgage and your Lender does not accept Personal Searches, we will have no option but to make a paper application to the Local Authority in question – this may result in you being charged a higher fee (as the Local Authority charges are often higher than that of the Personal Search Provider). There is also likely to be a delay in the search result being made available. This will not, however, affect any of the other searches.
Area Specific Search
In a majority of cases, our standard search package would be all that would be required. However, additional searches can be required in certain specific areas. For example, if the property you are purchasing is in an area where mining has occurred, then a Coal Mining Search will be required. Similarly, a purchase in Cornwall would require a Tin Mining Search. If an area specific search is required for your purchase, we will let you know.
If you intend to purchase the property for development purposes
Please be aware that, in a majority of circumstances development will require not only the usual Planning and Building consents but could also require the consent of the owner of the covenants that affect the land being purchased. This is known generally as “Estate Owner’s Consent” and failure to obtain that consent could render you liable for an action for breach of covenant. This could, ultimately, result in your having to demolish the structure you have erected and/or pay substantial sums of money to the Estate Owner to obtain retrospective consent. The fact that you have obtained the necessary permissions from the Local Authority is completely irrelevant and will not override any covenants that affect your land.
Depending very much on the wording of the restriction affecting the land, Estate Owner’s Consent could be required for something as simple as the erection if a conservatory to something as complex as the building of a new house estate.
The requirement for Estate Owner’s Consent is not unusual and, indeed, there are certain localities where the Estate Owner rigorously enforces the restrictions attached to the land. If consent is required and you fail to obtain it, then your planned development may not just be substantially delayed, it could be permanently prevented. In addition, almost certainly, there will be fees payable to the Estate Owner.
Therefore, if it is your intention to develop the land you are buying or you are intending to change its use, you must make us aware of that fact, in writing, at the very outset of your transaction. We will then provide you with an estimate of our professional fees to reflect the additional work involved.
If the proposed development involves a division of the land or building, our fee structure will alter to take account the further and more complex work involved. In these circumstances, a revised estimate will be provided to you but, in any event, our fees will be not less than £1500 +VAT.
Buy to Let
Unless you tell us otherwise, we will assume that the property you are purchasing is to be occupied by you as your home. If, however, you are purchasing the property with the object of renting it out, it is particularly important that you let us know at the outset especially where it involves the purchase of a flat.
Flats are subject to Leases and Leases contain provisions that will not permit the flat to be let out. If we know soon enough, we can check the Lease provisions and prevent you from wasting further time and expense on a lost cause. If you are obtaining Mortgage facilities for the purchase, it will be a condition of the Mortgage Offer that the Lease does not contain any restrictions on letting.
You must also make the buildings insurer aware that the property is rented out. If the Landlord insures the building on a block policy, you must tell the Landlord as failure to do so could invalidate the insurance. You will be responsible for the payment of any increased insurance premium involved.
Please also pay specific attention to the Mortgage Lender’s letting requirements – these will be detailed in your Mortgage Offer. The property must be let on an Assured Shorthold Tenancy. You should also be aware that the Lender’s requirements may restrict the persons whom the property is let and also the length of the letting. You must make sure that any letting strictly complies with the Lender’s conditions.
It is also worth noting that buy to let properties are subject to new stamp duty criteria which differ from that of your first property.
Buildings Insurance
In most cases, buildings insurance becomes your responsibility from the day Contracts are exchanged. If you are purchasing with the aid of a Mortgage, it is important to ensure that your buildings insurance meets your Lender’s requirements and the Lender’s interest is noted on the policy. You should check your Mortgage Offer carefully to ensure that your insurance does comply.
If your Mortgage Lender is arranging the buildings insurance for you, you need take no further action.
If you are a cash purchaser, it is entirely for you to arrange suitable insurance cover. We recommend that you take cover appropriate to your particular circumstances. It is for you to decide what is appropriate – we do not provide advice on this aspect.
Indemnity Insurance
There are occasions when a “defect” arises in the course of the purchase transaction and, quite often, the only option available is Indemnity Insurance. Where this is the case, your Conveyancer will explain the “defect” that needs to be insured and the premium involved.
Indemnity Insurance does not “solve” the problem but acts as a form of safety net in the event that the risk insured against materializes. One of the most common forms of Indemnity arises from the lack of documentary evidence relating to planning and building consents. For example, the current owner has built an extension that may not have needed planning permission but did require Building Regulation Consent and that consent was not obtained or the owner is unable to provide evidence it was obtained. Provided the Insurer’s criteria are met, Indemnity Insurance is available.
The Insurance does not give any warranty that the structure complies with Building Regulation Requirements. It will, however, act as a form of safety net in the event the Local Authority takes enforcement action. This could include the cost of upgrading the works to the standard required or, where that is not possible, the demolition of the structure and the loss in market value as a result of the structure being removed.
If you have any doubts about the integrity of the structure, then you would be well advised to have this checked by a structural engineer before you commit yourself to the purchase. Updated 27-01-2022