What to do when selling a home without building regulations approval.
Has your home been built, extended, modified 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 approval is required when carrying out certain types of building work on a property. These regulations are in place to ensure that the work meets set standards for design, construction, and safety.
Examples of when you will need building regulations approval include:
- New build, extensions and alterations
- Structural changes
- Loft conversions
- Changes in use (e.g. commercial to residential)
- Electrical work
- Fire safety
- Heating installations
- Plumbing works
- Replacement external doors and windows
- Accessibility modifications
What is notifiable work
Notifiable work is the term used for the types of building projects that must be reported to, and approved by, the Local Authority Building Control (LABC) department or an approved inspector before the work starts. The purpose is to ensure that the planned work will comply with the building regulations.
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. A National Inspection Council for Electrical Installation Contracting (NICEIC) registered electrician could, for example, sign off any electrical work they carried out.
See also:
No electrical completion certificate? What to do before selling your home
Building Regulations Completion Certificates
A Building Regulations Completion Certificate is an official document issued by the LABC or an approved inspector. The certificate confirms that the inspected building work meets the required building regulations and standards.
The certificate is usually issued after a final inspection, once the work has been completed and deemed to be compliant with the regulations.
I want to sell my home and I don't have a 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 your property. The forms will also ask you to provide copies of appropriate building regulations approval.
You must provide complete and accurate information when completing these forms. If the new owner finds any issues related to missing consent, you could face legal action for any resulting costs or losses incurred by the buyer. These costs could be substantial, including legal fees, the cost of remedial works, and any diminution in the value of the property.
A missing completion certificate could slow delay the sale, prompt a renegotiation or in the most extreme cases, result in the buyer pulling out.
See also:
What must a seller disclose when selling a property?
The work was carried out by a previous owner - am I responsible?
Yes.
The previous owner who originally carried out the work should have obtained a Building Regulations Completion Certificate. Critically, LABC holds the current owner responsible for any aspects that fail to meet building regulations, regardless of who actually carried out the work. This means that even if you didn't initiate the work, you could still be held liable for any regulatory shortcomings.
What if work that didn't need approval at the time, requires it now?
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 the requirement to obtain building regulations approval regulations at the time, or they decided to complete the works without getting approval, you will inherit the liability.
The fact the work was not inspected at the time, however, does not necessarily mean the work is substandard.
Can I just correct the work and get retrospective approval?
You could.
If you coordinate formally with the LABC, you could be issued a 'regularisation certificate'. This is the next best thing to a completion certificate, and it will be accepted by most buyers and their mortgage lenders.
Obtaining a regularisation certificate is time-consuming, potentially expensive and carries the risk that the work might not be compliant. As this article is aimed at those looking to put their property on the market imminently, this option would not be recommended.
Are there easier alternatives?
Yes.
The simplest and most cost-effective way of dealing with a lack of building regulations approval is with an indemnity insurance policy.
An indemnity policy provides financial protection for the new property owner against the costs of potential local authority enforcement action. If the LABC discovers the lack of building regulations approval, they will likely inspect the work. Based on their findings, the new owner might have to correct the work or revert the property to its original state.
An indemnity policy covers the expense of these corrections and any consequent decrease in property value.
Indemnity policies are a practical way of minimising any impact that the lack of building regulations can have on a sale. Policy costs are based on the property's value; for example, a £500,000 home could have a basic indemnity insurance cost of around £175.
How do I get an indemnity policy?
Indemnity policies are not sold directly to consumers. Instead, your conveyancing solicitor will recommend the most suitable policy that provides sufficient cover in the event of a claim. The policy is then proposed to the buyer's solicitor in lieu of the Building Regulations Completion Certificate.
Who pays for the indemnity policy?
The buyer or seller might pay for the policy, or both might decide to split the cost. It is more common for the buyer to offer to pay, however.
Important points
- 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.
Above all else…
You must not notify Local Authority Building Control of works that were carried out without approval.
If any approach has been made to LABC about the lack of building regulations, you won't be eligible for an indemnity policy. Do not reach out to the local authority about this issue. Your conveyancing solicitor will advise you on the best course of action.
