House selling conundrums
Most of us that have purchased properties are aware that it will hit at least one snag along the way.
It is best that these issues are dealt with promptly by the solicitors as nobody likes a nasty surprise popping up partway through a transaction which then ends up delaying a chain.
Agents tend to be able to spot certain issues at the point they are instructed by the seller if they are aware of the right questions to ask. This has the advantage of making the agents, sellers and their solicitors aware of the issue, allowing it to be fixed as quickly as possible. Thus, allowing for a smooth transaction.
In the first of a two-part series, Eleanor Lister, property solicitor for Berry & Lamberts, highlights the common issues that can arise and how to spot them early on.
What is the issue?
The buyer’s solicitor has read through the property information form, or examined the agent’s particulars, and noticed that a building regulations completion certificate for certain works has not been provided. Alternatively, the buyer’s survey may have highlighted certain works requiring a building regulations completion certificate.
The seller’s solicitor has asked the seller to provide the relevant certificate and it is not available.
A breach of building regulations can be very wide ranging – building regulations cover the construction of houses or their extensions, all the way through to the alteration of a single electrical circuit in the property.
Why is it an issue?
There are governmental regulations designed to set the minimum standards for works to properties. The current standards are set out in the Building Regulations 2010.
Local authorities have a general duty to enforce the building regulations. That said, local authorities do not tend to have the resources to actively seek out breaches so often enforcement action is taken after they are alerted to a breach by a member of the public or when a building inspector visits the property in relation to subsequent works.
Under section 35 of the Building Act 1984, the individual carrying out the works (i.e. the contractor) can be tried in front of the Magistrates Court and if found guilty can fined for the breach and then fines again on a daily basis until the breach is rectified.
As well as section 35, section 36 of the Building Act 1984 empowers local authorities to serve a notice on the property owner that commissioned the work ( current or previous) requiring them to either bring the work in line with building regulations or to remove the work that breaches regulations. If the property owner fails to comply with the notice, the local authority can undertake the works themselves, then take the property owner to court to recover their costs in taking this action.
Both sections 35 and 36 of the Building Act 1984 are time critical, and an enforcement action of this nature can only be taken within 2 years of completion of the works. This tends to be a relief to most sellers (and their solicitors) as most works highlighted will fall outside of this 2-year timeframe.
The local authority does have another, non time sensitive option available to them. Under section 36(6) of the Building Act 1984 the local authority can seek an injunction from the courts forcing the property owner to remove or remedy the works so that the property complies with building regulations.
Under the Lender’s Handbook for Conveyancers, the buyer’s solicitor is only able to request mortgage funds if they are satisfied that building regulations have been complied with, or they have obtained the lender’s consent to an indemnity policy being put in place, or there is no reasonable prospect of enforcement action in relation to the breach.
Solicitors have to ensure that both their buyers and the lenders are comfortable with a breach of building regulations before they are able to proceed to exchange.
Next week we look at how these issues can be resolved and timescales involved.
To discuss your residential or commercial property email Eleanor Lister Property Solicitor, or call on 01892 833 456.
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.