Buying a converted house with NO warranty – other half of building HAS one. Would you proceed?

[CG100]

Hi everyone,

 

I’d really appreciate some advice from anyone with experience of buying a converted property where the new-build/structural warranty is missing.

I’m in the process of buying a house that forms one half of a converted mill building (the whole building was converted about 3 years ago). Before I offered, I asked whether there was a new home warranty and was told yes.

I’ve now found out that:

• the house I’m buying has NO warranty at all

• the house next door (same building, same conversion, same developer) DOES have a warranty

• Checkmate (the warranty provider) say they will NOT issue a certificate for mine and won’t explain why

• the developer cannot be contacted and appears to have stopped operating

• the seller’s solicitor says there is an “indemnity policy” instead

I know indemnity does not cover structural issues – it only covers legal risk for the lender.

My mortgage broker (Nationwide) says it may still be acceptable from a lending perspective because the property has been lived in before and has building regs sign-off, but that the final decision will depend on:

1. my solicitor’s report, and

2. the valuation/survey.

I will be getting a Level 3 survey if I proceed.

My concerns are:

• why the next-door property got the warranty but mine didn’t

• why Checkmate won’t issue the certificate and won’t give a reason

• whether indemnity-only is actually safe

• whether this will affect resale in the future

• whether I should proceed if the survey is good

• what size of price reduction is reasonable in this situation (they may well not offer one)

I’ve told the agent I can only move forward if the price is reduced to reflect the increased risk.

Has anyone bought a house in a similar situation?
Would you proceed with indemnity only if the survey was clean?
And how much of a reduction would you expect for a missing warranty on a 3-year-old conversion?

Any advice or shared experiences would be hugely appreciated.

Thanks!
Corinne

[Thorfun]

what does your solicitor advise?

 

1 hour ago, CG100 said:

And how much of a reduction would you expect for a missing warranty on a 3-year-old conversion?

not trying to be funny but if the building had structural issues and needed to be rebuilt then i would suggest the rebuild costs be knocked off the asking price. obviously the seller will reject this but if you think of worst case scenario that a structural warranty will give you then that's the cost you'd incur without one.

 

if it's a semi detached though if one side has a warranty then i can't understand why the other side wouldn't? if structural issues happen on one side then won't that also affect the other side?

 

tbh, i don't have a clue what to advise here apart from speak to your solicitor! maybe others will be along to offer something else.

[torre]

Half a conversion with a warranty and half without would be a red flag for me, and I'm sure other buyers, and so of course that negatively affects saleability and future value - the impact diminishes over time as the current owner is likely to have already bumped into serious issues.

 

I wouldn't rely on the indemnity at all but you could ask that the vendor purchase a retrospective warranty, preferably from the provider of the other half's warranty.

 

That will cost the vendor a few thousand, but if they won't agree then I'd personally want to knock a lot more than the warranty cost off my offer regardless what my own surveyor says, because of the extra risk you're taking on.