Building Regulations · Report on Title scenario
Yes, and it is worth knowing exactly what you are accepting. The policy covers financial loss if the local authority takes enforcement action over the missing approval. It does not confirm the work was done properly, it does not make the work compliant, and it gives you no comfort at all about safety. It is cheap, it is quick, it usually satisfies the transaction — and it answers a different question from the one most buyers think they are asking.
From the e-ROT archive
This scenario is drawn from Report on Title material dealing with this specific circumstance.
Financial loss arising from enforcement action by the local authority over the absence of building regulations approval. That is the insured risk, and the policy is usually a one-off premium with cover running indefinitely and passing to later owners.
It is not a warranty, a guarantee or a certificate. Nobody has inspected the work in order to issue it; the insurer is pricing a small statistical risk, not forming a view about this house.
If a policy was taken out on your purchase and you were not clear what it covered, what was explained at the time is a reasonable place to start.
Find out what should have been explained → WhenIBought.comA policy can only be obtained while the local authority has not been told about the breach. Once the council knows, the risk is no longer uncertain and no insurer will cover it.
The practical consequence is that the indemnity route and the regularisation route are mutually exclusive, and you have to choose before you act. Ringing the council to ask an innocent question about the extension is enough to close the insurance option permanently — for you and for everyone who owns the house after you.
The policy passes on, which is the point of it. Your buyer's solicitor will want to see it, and may ask for the cover to be increased if the house is selling for considerably more than it was insured at.
Whether an increase is actually necessary is a negotiating point rather than a rule, and the Lexsure wording below takes the view that a buyer can usually be persuaded it is not. Either way, the question comes back round, which is a reason to keep the policy document somewhere you will find it.
From the e-ROT archive
Report on Title paragraph
The seller will provide on completion at their expense a Building Regulations indemnity policy to indemnify you and any future Buyer against the risk (in our view, unlikely) that the Local Authority would take any enforcement action arising from the fact that no documentation is available to prove that Building Regulation Approval was obtained from the Local Authority when the {works} was installed at the property. You might be asked to pay for an increase in the cover in the future if you sell the house at a higher price, but in our view, you should be able to persuade a buyer that an increase in cover is not necessary. The policy only covers financial loss which you may suffer as a result of any enforcement action which may be taken by the local authority, it does not provide you with any comfort that the works have been carried out safely and as such you are advised to have these checked by a suitably qualified professional. …
Master precedent wording. This is current Lexsure Report on Title material, shown here in extract and reproduced exactly, including the merge field {works} that a conveyancer completes. It is professional precedent wording and is not advice about any particular property.
Do not rely on wording copied or saved from this page. Get the current wording dealing with this scenario.
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