Considerations before Purchasing a House Without Building Codes Compliance
Purchasing a property without the necessary building regulations approval can have significant implications for home safety, obtaining a mortgage, and resale value. Here's what you need to know.
Home Safety
Buildings erected without municipal approval may not comply with safety codes, increasing risks of structural flaws, electrical hazards, or other unsafe conditions. Non-compliance with building regulations undermines the assurance that the property adheres to established safety standards, and the owner may be held liable if an unpermitted structure causes injury or a fire.
Obtaining a Mortgage
Most lenders require verification that the property complies with local building regulations before approving a mortgage. Properties without approved plans or permits may fail appraisals or loan approvals, as lenders view them as higher risk or potentially non-compliant with safety standards. This can delay or prevent financing.
Resale Value
A lack of building regulations approval makes a property harder to sell. Buyers may be reluctant or demand price reductions or suspensive conditions, and some may walk away from the purchase entirely. Insurance coverage may also be jeopardized, further complicating ownership and resale.
Remedies
If building regulations consent is missing during the conveyancing process, engaging qualified individuals or companies to check the work can enable renegotiating the price at which you buy. In some cases, an indemnity policy may be obtained to cover the consequences of enforcement action. However, it's important to note that indemnity policies cannot prevent the action being taken.
When selling a home that had work done without building regulations approval, an indemnity policy from the seller should be obtained, especially if the breach is less than 10 years old, and care must be taken to ensure the policy limit covers any increase in value to the property.
Prevention
It's preferable to know what work might be needed before making an offer, so getting in-depth surveys done and taking a structural engineer and builder to view the property is recommended. Enforcement action may give a set period of time to remedy the work, but plenty of money should be available for any remedial work that crops up.
Importance of Building Regulations
Building regulations function as a marker of quality and safety, and a failure to obtain consent could raise questions about the quality and safety of the work and its structural integrity. The building regulations are important as they set standards to ensure a home is safe, comfortable, and energy-efficient.
Conclusion
Buying a property without official building regulations approval exposes the buyer to safety risks, potential legal penalties, difficulties securing a mortgage, and diminished resale prospects. Rectifying the issue requires engaging qualified professionals to create “as-built” plans for municipal approval, a process that is costly, time-sensitive, and subject to local authority discretion. The only way to completely remove the risk of enforcement is to have the work retrospectively signed off by the local authority or the relevant regulatory body.
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