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Indemnity Policy when purchasing/selling a property

An indemnity policy may be required for a variety of reasons.  Perhaps a building regulations completion certificate was never issued for the construction of a conservatory or perhaps planning permission was required but never obtained.  Perhaps there could be a covenant affecting the property which has been breached by the erection of an outbuilding for example.  A covenant on the title preventing any alterations or additions to the place without the prior written consent of a previous owner or neighbour and as such consent was never obtained.  Whatever the case if you are getting a mortgage in order to buy your lender will likely require indemnity insurance to be put in place to cover the risk caused by the defect or issue irrespective of your intention to remove the conservatory at some stage in the future.

Only recently a client of ours was quite concerned to learn that the only thing holding up the exchange on her property purchase was the requirement for indemnity insurance for the conservatory in the house which she intended to knock down and replace once she moved in any way.  If you do not require a mortgage  it is entirely a matter for you whether you take out indemnity insurance cover.  All of the facts should be considered when deciding if it is necessary including the questions of when the conservatory was constructed and whether the defect can be rectified.  If cover is necessary it is usual for the client to ask the seller to pay the full cost of an indemnity insurance policy.