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Indemnity Insurance and Lack of Planning Permission

Indemnity insurance for lack of planning permission can protect you if any modifications or building work was carried out on your home without prior authorisation from your local authority. A legal indemnity insurance policy is the easiest solution to situations where planning permission should have been obtained but, through no fault of the homeowner, was not; rather than sorting out the problem directly and applying for permission later, or discussing the issue with local authorities, indemnity insurance instead recovers costs if the building must be returned to its original state or fines have to be paid.

The Town and Country Planning Act 1990 sets out certain rules and regulations for the modification or alteration of land. Before any building work is commenced planning permission should be sought but this isn't always the case. Many people try to avoid planning permission because they don't want to go through the process of an application or didn't realise that they needed permission at all; should the property be sold in the future, lack of planning permission can really affect the sale.

Work Requiring Planning Permission

Only certain modifications require planning permission, such as:

  • Demolition of buildings.
  • Rebuilding (including construction).
  • Structural alterations.
  • Additional buildings (including extensions).

Risk of Not Taking Out Planning Permission

If an alteration or building required planning permission which was not sought, local authorities have the right to take enforcement on the property owners to remedy the breach of planning. This could mean altering, removing or refining the structure or issue a fine up to £25,000.

Indemnity Insurance for Planning Permission

Indemnity insurance for lack of planning permission is the most common solution for situations where planning permission should have been sought but wasn't. It covers the cost of the legal risk from not having planning permission and only costs £60 - £500 as a one off fee (transferred to each house owner). Should local authorities take action against the property owner a claim can be filed with indemnity insurance for lack of planning permission to recover costs of altering the property or loss of value to the property due to intervention from local authorities.

To qualify for indemnity insurance for lack of planning permission the work must have been carried out 12 months previous and the property must be used as a residential dwelling. Prior contact with the council regarding planning permission must not have already occurred; failure to provide accurate information regarding this issues will render the policy invalid.

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