Indemnity Insurance Protection for Lack of Building Regs on Properties
Indemnity insurance for lack of building regs is a type of insurance that protects the buyer of a home when certain structures or alterations were added to the property without building regulations. Normally, the seller will take out this insurance if building regulations weren't followed but the buyer can also purchase indemnity insurance for a one-off fee. However, indemnity insurance for building regs is only financial protection. It won't protect the buyer from local authority enforcement or if the structure must be removed.
Cover for Local Authority Enforcement Only
Indemnity insurance for building regs only covers the work carried out if it was more than 12 months ago. Furthermore, it only covers local authority enforcement. If the building work is deemed unsafe and you need financial protection to cover the cost of repairs or further legal action then you won't be covered under indemnity insurance policies.
Indemnity insurance for building regs only cover the financial risk of facing local authority enforcement. They could ask for the structure to be removed or altered and you'll be financially protected for this but indemnity insurance won't stop it happening. This could mean that the structure of the home you buy is adversely affected by the modifcations and, even though you'll retain some value of the home from the indemnity insurance, the property value will never be the same when it is sold on.
Prior Contact from Local Authorities
To obtain indemnity insurance for lack of building regulations you can't have contacted, or been contacted by, a local authority before about the building work. Even if the previous owners were contacted and you bought the house, indemnity insurance will not cover you if prior contact has been made.
- Flickr: House of Bryggen