Selling an altered home? Plan ahead

Robert Telfer with a step by step guide to selling an altered property

Selling a home can be extremely stressful, especially if the property was built, altered or extended in the past 20 years.

Once you have accepted an offer, there is the added angst of waiting for missives to be concluded. It can be a waiting game whilst the buyer applies for their mortgage offer and their solicitor makes all the appropriate enquiries.

And that's assuming all of your paperwork is in order...

Naturally, everyone wants a smooth, hassle free sale and it’s our job as solicitors to make that happen. As a seller, there are also steps you can take to help the process.

Before accepting an offer, or even placing your property on the market, ensure that either you or your solicitor hold the necessary local authority consents.

The absence of relevant paperwork could hold up, and in some cases jeopardise your sale.

What do you need?

If your property has been built, altered or extended within the past 20 years, the buyer’s solicitor needs to see all building warrants, drawings and certificates of completion covering that period. They will also require all planning permissions within the last 10 years. If there are no consents in place, a Letter of Comfort can (in some circumstances) be obtained from your local authority for a fee.

If you don’t hold this paperwork but you are aware that the consents are in place

If you have carried out the building work during your ownership, you should be able to retrieve copies of the relevant paperwork fairly easily from your architect or local council (the latter charging a fee).

If the building work predates your ownership, you might assume that the relevant documents are kept safely with your mortgage lender. However, in 2003 a process of ‘dematerialisation’ began. Most lenders no longer wanted to hold original deeds for various reasons. All paperwork was either returned to property owners or destroyed. Even if your lender does hold the relevant paperwork, they won’t be in a rush to retrieve it from storage and forward it on. In my experience, some lenders haven’t released them until weeks after the sale has gone ahead. Moral of the story – don’t rely on your lender.

Your best bet is to contact the solicitor who acted for you in the purchase. Solicitors must retain purchase files for at least 10 years and most keep important building documents beyond this period. If your purchase took place within the last few years, it might be that the solicitor recorded digital copies on their case management system.

Granted, it’s an extra inconvenience you don’t need. However, lack of paperwork can become a major stumbling block during a sale as most buyer’s solicitors will not progress without it. They are also acting for the mortgage lender and have an obligation to ensure that there is nothing prejudicial to their security over the property. If all else fails, order copies from the council. You may begrudge paying the fee but it is ultimately an investment if it facilitates the swift conclusion of the missives for your sale.

In the event no consents exist, don’t panic

The most common way of overcoming this hurdle is to offer the buyer a Title Indemnity Policy (TIP). This is a type of insurance protecting the owner of a property with a legal defect in the title against potential financial loss. It covers, amongst other things the absence of local authority consents. It acts as an alternative to obtaining retrospective consent and provides financial compensation should the local authority take enforcement action in the future (i.e. require the owner to return the property to its original state or carry out remedial works). Obtaining this type of insurance is quicker than obtaining retrospective consents and may help to keep the sale on track for the anticipated date of entry. But it is not without its drawbacks.

First, the buyer might reject a TIP, and instead insist on the seller applying for retrospective consent. If they are spending a considerable amount over Home Report value, they might argue that the appropriate consents should be in place to protect their investment and avoid potential issues during resale.

Second, the TIP does not overcome the lack of consents. It merely provides financial compensation in the event of the council taking enforcement action.

The TIP, although commonly used, is therefore a sticking plaster and should be approached with caution.

Ultimately the best advice is to secure the necessary paperwork before putting your property on the market and accepting an offer. If in doubt, speak to the local authority, your solicitor or a surveyor. It could save you some sleepless nights further down the line.

For more advice, and a free initial consultation, call us on 0141 649 9552.