Property Alterations - why such a fuss?
It seems incredible in this day and age, but the regulations as to the erection of, and alterations to, properties are major issues that can have both delay and cost implications in conveyancing.
Understanding the background 1: what are these regulations?
For most types of properties there are two types of regulatory approval that arise during the course of the conveyancing. The first of those approvals is planning permission which generally only applies to the original building of the property and any alterations that would alter the appearance of the property. The second of those approvals relate to building control and applies not only to external alterations but also to many alterations inside a property, even those that appear quite trivial.
There are two potential problems that can arise in relation to building control.
The first is that the person who carried out the alteration DID obtain the first stage of building approval called a "Building Warrant" but did not obtain the second stage which would have indicated that the alteration had been completed satisfactorily (called the "Completion Certificate"). A Building Warrant has a shelf life of only three years and if that period has elapsed then it is sometimes necessary to obtain from the Local Authority a document that for most practical purposes will act as a substitute for the Completion Certificate. The document is called a "Letter of Comfort"; “Retrospective Consent” or a “Property Inspection Report". To provide such a letter, the local authority will generally require to charge a fee and visit the property. It is possible to arrange alternatives such as a report from an expert or an insurance policy but all of these have a cost.
The second situation is that the person who originally carried out the alteration DID NOT obtain the Building Warrant and just carried out the alteration. In these circumstances the issue can be more complex and carry greater dangers. To resolve this situation the Local Authority may still provide the solution of a Letter of Comfort but it is possible that they may require a full retrospective Building Warrant application. When such situations arise, costs and delays tend to accelerate.
There is a third type of approval which is listed building consent but this only applies to those properties which have been listed as having some sort of architectural or cultural importance.
Understanding the background 2: why do these issues matter when alterations were carried out years ago?
When issues arise as to alterations to properties which appear to have been carried out many years previous, clients often are surprised that such matters are attributed any concern.
In truth, in purely practical terms, the problem is mostly one of confidence for both the client and any lender involved. Rarely does the absence of the regulatory approval mean that the property is likely to fall down but the fact of its absence creates a question mark over the property. Any sensible person would recognise that the absence of regulatory paperwork for an alteration that was carried out 25 years ago is an entirely different issue from one was carried out six months ago.
However, sense and the law can be uneasy bedfellows!
Although there is a clear legal position as regards planning permission, the position over building control matters is not at all clear (other than the ridiculous position that one must investigate everything following a 1964 Act). When a standard purchase contract was drafted in 2009 there was an attempt made to set a "reasonable" period of 20 years. Whether such a period is reasonable is arguable but the problem is that this period of 20 years is advisory and some solicitors, when acting for purchasers want to look further back. If you are selling a property and such a solicitor is involved in acting for the purchaser, problems and cost are likely.
In this area of alterations, it is regrettably often the case that common sense does not prevail. Professionals involved are concerned that a problem may occur on the eventual resale of the property; such a problem may arise either for the purchaser, or for the purchaser's lender (in the unfortunate situation of a repossession) and therefore the purchaser or the lender may wish to pursue the person providing the home report or the solicitor for failure to do their job. (Remember that both the person providing the home report and the solicitor acting for the purchaser generally also have obligations to the lender, who otherwise would not provide a mortgage over the property).
Matters to look out for when you are purchasing:
McVey and Murricane do endeavour to bring sense to this very tricky area. Advice will be provided, where you are a purchaser, as to what is reasonable given the nature, age and likely cost of the alteration as well as the level of mortgage to be taken over the property. That allows you to take a reasoned viewpoint as to whether you have any concern over an alterations issue.
If the level of mortgage that you are taking over the property (which you are purchasing) is high, then, even though you may not be concerned about the alteration not having the relevant paperwork, the requirements of your lender may mean that the matter remains something McVey and Murricane require to resolve. If the matter is not resolved then application cannot be made to your lender for the mortgage finance.
Matters to look out for when you are selling:
If you are selling a property, it does not matter how sensible McVey and Murricane approach such matters; the issues will be determined by the terms of the Home Report over your property and the attitude of the purchaser's solicitors. It can be extremely frustrating but McVey and Murricane will endeavour to guide you to the best solution. If the solicitors acting for the purchasers are extremely dogmatic that can involve a great deal of extra work or a decision on your part to walk away from the deal.
Remember also that if an application is required to the local authority for a Letter of Comfort, the local authority will almost certainly charge fees which can be quite substantial. If the alteration was carried out prior to your ownership of the property, you may feel annoyance that you bought the property without this matter being resolved. It is possible that your solicitor or surveyor did make an error in which case you may have some right of recourse against them. However, it is best not to assume that you have some immediate cast-iron claim against the solicitor or surveyor. Each case has to be looked at depending upon the circumstances of the time and circumstances. Additionally the cost of pursuing a claim may not be economic.
It is helpful to explain briefly why something that may appear to have been missed at an earlier date may not provide you with a cast iron guarantee. As with other areas in life, standards change. So, an issue that is on "the radar" now may not have been so when you bought.