Buying a new home-BUYER BEWARE
The principle of caveat emptor (“buyer beware”) applies when purchasing any property. This means that it is the buyer’s responsibility, with help from their solicitor, to understand what they are buying.
A property with a newly-built extension or recent alterations is likely to be more attractive to buyers. But all major renovation work (loft or roof conversion, two storey rear or side extension, construction of a permanent outbuilding, solar panels, gates, boundary wall or any internal work in a building) carried out in the property needs to have planning permission from the local planning authority and must be building regulation compliant.
The work is also more likely to need planning if it significantly alters the appearance of the property.
Although some work may fall within the term Permitted Development. Permitted development is a term given to works which may technically require planning permission but for which permission is deemed to be granted under a general permitted development order.
The exact legislation is detailed in the Town and Country Planning (General Permitted Development) Order 1995 as amended by the Town and Country Planning (General Permitted Development) (Amendment) (No. 2) (England) Order 2008.
Why do building regulations matter?
The regulations are designed to protect the safety and welfare of those in and around the building.
Building regulations are in place to cover a number of different areas, including structural, electrical and fire safety, ventilation and hygiene, sound proofing, damp proofing, drainage and waste disposal, protection from falling, collision and impact, conservation of power and fuel.
If the property has been altered without building regulations approval, there is a risk that the building may not meet the required standard of safety and energy efficiency.
In addition to construction work, building regulations also cover some home improvements such as replacing fuse boxes and connected electrics, plumbing in a new bathroom, changing electrics near a bath or shower, replacing doors and windows putting in cavity wall insulation, putting in extra radiators.
Works such as routine repairs and maintenance (excluding fuse boxes, oil tanks and glazing units), installing a new sink, toilet or bath that fits in the same way as the old one and new lighting and power points (excluding those around a bath or shower) are unlikely to require building regulations approval.
A certificate of compliance with the building regulations should be issued to the property owner and the local authority should be notified that the work has been carried out in accordance with the regulations.
What do sellers need to reveal?
The TA6 Property Information Form
To simplify the information-gathering stage of the process, the Law Society has published a standard property information form. The form is sometimes known as a “PIF” or TA6. This form includes a wide range of questions that sellers must answer inclusive of information such as neighbours disputes, Japanese knotweed, alterations, planning and building control, any breaches of planning permissions or building regulations, whether there are planning issues to resolve, or whether unfinished work lacks necessary consents.
For all work, the seller must provide document copies of planning permissions, building regulations approvals, and completion certificates. If all the documents cannot be provided, the seller must explain why.
A property survey can be an invaluable aid here. An adverse property survey report isn’t usually a reason to panic, however. Get as much detail as you can, do the necessary sums and communicate with the seller.
What are the risks to the home buyer?
There is a range of potential consequences for anyone purchasing a property with building work that lacks the proper permissions and approval or if the planning permissions have been refused or the building regulations have been breached by the seller or if the work has not been signed off by a building inspector the following risks could affect the new home buyer:-
1. Mortgage ability
Whether you can get a mortgage for the property will often be your first concern. Some lenders will simply not lend on a property affected by planning issues. If you are planning to sell the property in the next few years, you may find that this issue will affect the number of potential buyers.
2. Cost of reversion or alteration
The council may enforce a building control or planning order against the property. The new owner would then need to pay for the cost of returning the building to the state it was in before the work (“reversion”) and to bring the work in line with current planning and building regulations.
3. Diminution of value
These hazards can greatly impact the value of a property.
4. Enforcement notices
Local authorities can serve enforcement notices against any property owner for breaches of the law if a property has been extended without the necessary planning consents or building regulations. This might require the extension to be modified or demolished, or you being fined or even imprisoned if you fail to address the breaches – even if you were not the property owner at the time the work was carried out.
Where work is carried out without planning permission what can the new owner do?
1. Apply for retrospective consent
The new owner can apply to the local authority for retrospective consent. Where the work is fully compliant and does not breach any conservation area or listed building-related restrictions, the council may grant this consent or in some cases where the local authority is unable to confirm if the work is fully complaint, the inspector may instead confirm that they will take no further enforcement action. They will issue a Regularisation Certificate.
2. An indemnity policy
There is a risk that the council could refuse retrospective consent. As a result, the new owner may instead opt to take out an indemnity policy. The policy will insure against the cost of work or losses should the council take enforcement action. However if the council has already refused consent, the buyer may also find it impossible to take out a policy. It would be reasonable to expect the seller to pay for the policy, although these are not expensive.
However having the insurance does not change the fact that the safety of the building may be in question. It will not cover you for general costs or losses resulting from any defects in the property. If the previous owner had permission refused by the local authority to carry out the works to the property, the insurance will be invalid. The adjustments made to the property may only be covered by the indemnity insurance if they are over a year old. If the local council are informed that you do not have a completion certificate for the works, the policy will be invalid.
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