Insurance for lack of planning and/or building regulations  

May 24 2021 By Mitch Cookney

What does the policy cover? 

Planning and/or building regulations insurance provides cover where approval has not been obtained for the works carried out on a property, in the event of the local planning authority issuing the insured with an enforcement notice, planning contravention notice or breach of condition notice. This policy does not, however, cover any adverse matters that should have been picked up by a survey carried out on the property. 

What is an enforcement action?  

Enforcement action is taken by the local authority when there is a breach of a planning condition, breach of building regulations, or works are being undertaken without relevant permissions being obtained. If there is a breach, or works are taking place without permissions, the local authority will serve an enforcement notice on the land owner confirming what the contravention is. They may require that works stop immediately. 

Enforcement notices will dictate how the breach can be rectified or stipulate how the landowner can apply for the correct permissions and set out the timescales that must be adhered to. For example: 

A planning and building regulations policy will respond in the event the local authority issues an enforcement notice, by rectifying the works that have been carried out and bringing them up to their required standard, applying for retrospective consent for the works or ensuring that works are correctly signed off. In the worst case scenario, where the works (perhaps an extension for example) have to be removed, the policy will respond by paying for the removal of the extension and making good any damage to the remainder of the building.

Should it become apparent that the value of the property has dropped due to the demolition of the extension, the policy would, in principle, cover the actual loss between the value of the property with and without the extension. Cover is very often required for mortgage lenders rather than the buyers of the property as the lender wants to ensure that the money they are lending is secure. However, the policy covers the purchaser, the lender and any successors in title. 

Please get in touch for more details.