Indemnity insurance for house sale

[Sali]

I was wondering if anyone has been asked/required to take out indemnity insurance on a house sale. Apparently, the house has an old convenant, (not pointed out by our solicitors 10 years ago, but too late to do anything about now), that restricts changing the appearance of the property.

 

Our solicitor says that having upvc windows installed constitutes a change of appearance and that I can either apply for retrospective approval from the housing association or take out indemnity insurance. The catch is if I apply to the housing association, it can take X amount of time and may (only may) cost money - but that if I do so I would no longer be eligible for indemnity insurance.

 

Most of the street has had replacement windows. I have tried to find out from the housing association what the process is, but other than saying that asking in advance incurs no cost, (too late for that) they do not reply. Logic would suggest that retrospective permission would also be straightforward and free, but council/housing associations are often not logical.

 

In ten years the covenant has not been enforced, but that does not assuage the fears of the buyer's solicitors. If only our solicitor had been so conscientious.

 

I've only ever taken out insurance for a set period - for my house or car - so how does indemnity insurance work for houses when you just don't know if or when it will ever be claimed against?

 

What kind of premium are people paying?

[fletch70]

Hi Yes I took out indemnity insurance when I sold my house. It cost about £100 if I remember and was paid for in the solicitors fees. It really is quite common

[unclebulgaria67]

These indemnity insurances are relatively recent to my knowledge. So they might not have been available when you bought the property.

 

The policy would cover the new owner in the event that the housing association took action in relation to the coventant. This might be more of an issue with a block of flats, but I cannot see them taking action in regard a house, as long as the appearance was not significantly changed. The policy is a one premium for as long as the new owners owned the house.

 

You would probably be best to pay the buyers solicitors the £100 and they can arrange the policy.

[Sali]

Fletch70 and unclebulgaria67

Thank you for your replies. Well, even though it sounds money for old rope, I guess I have no choice. At least it's not as expensive as I thought.

[fletch70]

Maybe have a word with your solicitor and ask him the price. I would only be doing it if the buyers solicitor asked for it . If they don't and as long as you answer any questions truthfully you would be in the clear.

[Ganymede]

Hi Yes I took out indemnity insurance when I sold my house. It cost about £100 if I remember and was paid for in the solicitors fees. It really is quite common

 

Yup.

 

In conveyancing now everything you can think of is covered by an insurance policy and is standard practice now!

[Sali]

Well, I've asked the solicitor for prices. You are right Ganymede, insurance premiums are booming - shame they are so poor when it comes to paying out - there's always that caveat in tiny font, legal-speak, you miss.