If you are buying or selling a home, your legal representative or estate agent may suggest that you purchase, or accept, an indemnity policy where important documentation is missing.
An indemnity policy is a type of insurance that protects the policyholder against financial loss from a specific, pre-identified risk. It is often used in property and legal transactions to cover issues like missing documents or certificates, breaches of covenant, or unapproved, unauthorised building works, and it provides financial compensation if the risk occurs, rather than fixing the underlying problem itself.
Indemnity insurance is often used as a quick fix during property sales to reassure buyers and lenders, but you should be aware of its limitations.
An indemnity policy doesn’t confirm that building works meet regulations or safety standards: they simply offer limited financial cover if the local authority later takes enforcement action.
They do not protect you and your family from dangerous installations, poor design, or life-safety issues. They can give you a false sense of security.
Ask yourself why the work is not covered by certification from Building Control or from a Competent Persons Scheme. Was it carried out by a rogue trader? Did they deliberately choose not to have the work regulated? What other works may have been carried out without the benefit of an application?
If work was carried out post-November 1985, you or the building owner can apply for a Regularisation – a retrospective building regulations application which is intended to ascertain whether the work met the required standards in place at the time it was carried out.
There is a charge for this service, and various elements may need to be exposed or justified to ascertain compliance, but it may also mean that you will not face the same problems should you come to sell your property on the future.
The above does not constitute legal advice. You should carefully discuss your options with your appointed legal representative; you can contact your local authority building control team where you may be able to apply to regularise any unauthorised works.
