What to do if selling a home without building regulations
Has your home been built, extended or renovated without building regulations approval? Are you missing a completion certificate? Here is what to do when you want to sell.
When do I need building regulations approval?
Building regulations (aka 'building regs') are designed to protect the health and safety of the people living in the property. Any new building construction and many alterations to existing buildings, are required to comply with building regulations.
Areas covered by building regulations include:
- New build, extensions and alterations
- Electrical work
- Fire safety
- Heating installations
- Plumbing works
- Replacement doors and windows
If the work carried out needs building regulations approval then it is known as 'notifiable' work. There are three levels of notification:
- Full plans - a detailed plan of the project is submitted to LABC before the project commences
- Building notice - typically used for smaller projects, detailed plans do not need to be submitted.
- Competent person - certain registered tradespeople are able to issue a building regulations certificate on their own works. An NICEIC registered electrician could, for example, sign off any electrical work they carried out.
I want to sell my home and I don't have a building regulations completion certificate
Once you have accepted an offer on your property, your conveyancing solicitor will ask you to complete various property forms. These forms will ask you to disclose any works, or knowledge of works, carried out on the property. The forms will also ask you to provide copies of appropriate building regulations approval.
You must not omit any details or be dishonest in any way. On discovering any issues, the new owner could take legal action against you for any costs or losses incurred as a result of the missing consent. These costs could be substantial including legal fees, the cost of remedial works, and any reduction in the value of the property.
A missing completion certificate could slow down your sale, prompt a renegotiation or in the most extreme cases, jeopardise the sale.
The work was carried out by the previous owner - am I responsible?
Yes. LABC (Local Authority Building Control) will hold the current owner liable for anything that does not meet building regulations - even if the current owner did not carry out the work.
The owner who carried out the work should have obtained a ‘certificate of completion’ issued by the LABC buildings inspector.
It may be that the work carried out was not subject to building regulations at the time. In this case, a completion certificate will not be required. However, if the previous owner was unaware of any relevant regulations at the time or it was decided to complete the works without notifying LABC, you will have inherited the liability.
The fact the work was not inspected does not mean it is substandard, only that the building control procedures were not followed.
Can I just have the works put right?
You could. Assuming you did so formally in conjunction with LABC, you could be issued a 'regularisation certificate'. This is the next best thing to a completion certificate.
However, this option is time-consuming, potentially expensive and carried the risk that the work might not be compliant.
As this article is aimed at those looking to put their property on the market, this option would probably be too long-winded.
So what are my options?
The easiest, cheapest and most common way of dealing with a lack of building regulations approval is by purchasing an indemnity insurance policy.
An indemnity policy will cover the new owner of the property against costs and losses as the result of the local authority carrying out enforcement action.
Enforcement action would be the likely consequence of the LABC being notified of the lack of building regulations approval. The local authority would most likely carry out a subsequent inspection of the works and decide whether they meet the regulations.
The local authority may then require the current owner to rectify the work or even return the property to its’ previous state.
The indemnity policy would cover the cost of the remedial works and any 'diminution' (reduction) of value.
The cost of the policy will depend on the value of the house; the higher the value, the more the insurance will cost. If the house is worth £500,000, basic building regulation indemnity insurance could cost around £175.
Who pays for the indemnity policy?
Sometimes the buyer, sometimes the seller and sometimes 50:50.
However, we would recommend, given the low cost of indemnity, that you, as the seller, offer to pay for the policy. A policy would be purchased through the conveyancing solicitor during the conveyancing process. Indemnity policies are not available directly to the consumer.
Indemnity policies are a practical way of minimising any impact that the lack of building regulations can have on a sale.
Important points to remember
- Building regulation indemnity insurance only covers the owner against an enforcement action from the local authority; it does not cover against any costs incurred as the result of substandard works having been carried out on the house.
- Because the insurance does not guarantee the quality of the work done, your buyer may be relying even more heavily on the surveys carried out on your home.
- The insurance will be void if any contact is made with the local authority regarding the lack of a completion certificate.
And most importantly of all…
If any approach has previously been made to LABC about the lack of building regulations to the local authority, you will not be able to obtain a building regulation indemnity insurance policy. Under no circumstances should you contact the local authority and notify them. our conveyancing solicitor will advise you on how best to proceed.
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