I do not want the planning indemnity policy — what am I taking on?

I have declined the planning indemnity policy — what am I taking on?

You are taking on the whole of the enforcement risk, and it is worth being exact about what that consists of. A breach of planning control is not itself a criminal offence. Failing to comply with a notice issued to deal with the breach is. And if a notice is served after you own the property, the person who has to remedy the breach — and pay for it — is you.

From the e-ROT archive

This scenario is drawn from Report on Title material dealing with this specific circumstance.

Lexsure master Report on Title paragraph: Planning Permission - Discharge conditions (Indemnity Insurance Declined) · See the wording

Where criminal liability actually starts

This is the point most often got wrong in both directions. A breach of planning control — unauthorised work, an unsatisfied condition — is not in itself a criminal offence, so nobody is going to prosecute you for buying a house with one.

Non-compliance with a notice served to deal with the breach is a different matter and does carry criminal liability. The sequence is: breach, then notice, then a period to comply, then an offence. Declining insurance does not put you anywhere near the end of that sequence on day one. It means that if the sequence starts, you fund all of it.

What the authority has available

More than most people expect. Enforcement notices and breach of condition notices are the familiar ones; the list also runs to enforcement warning notices, planning contravention notices, stop notices, temporary stop notices and injunctions.

Whether any of them is used is discretionary, and action can be taken while work is ongoing or long after it is finished. The practical exposure is the cost of whatever a notice requires, the legal cost of dealing with it, and the time.

The cost that arrives even if nothing happens

It arrives when you sell. Your buyer's solicitor will see the same breach, raise the same concern and ask for the same protection — and by then the position may be harder, because the longer a breach is on the record the more likely it is that the authority knows about it.

That is the real argument for a policy, and it is a commercial one rather than a legal one: the premium is usually small, it passes to future owners, and it removes a question from your own sale.

If you decline it, expect to be asked to confirm in writing that you were advised and are accepting the risk. That is not your conveyancer being difficult. It is the ordinary record of a decision you made against advice, and it is worth keeping your own copy of it.

Planning Permission - Discharge conditions (Indemnity Insurance Declined)

Master precedent Lexsure e-ROTScope Cover declined by the buyerWord count 73Status Current master paragraph

It is important to understand that whilst a breach of planning control will not automatically constitute a criminal offence, criminal liability can arise if there is non-compliance with a notice issued by the local planning authority to tackle the breach. Should the local planning authority decide to take enforcement action against the property, you as the new owner would become responsible for remedying the breach and could face significant costs in doing so. …

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