First Title Insurance plc has launched a new policy to protect homebuyers from potential exposure to new risks from the concealment of breaches of planning by sellers.
The initiative comes in the wake of the Localism Act 2011, which was brought into force on 6 April this year, and created new powers for enforcement of breaches of planning control.
Previously, breaches of planning control became immune from enforcement action if none had been taken prior to the elapse of the immunity periods provided for in the Town and Country Planning Act 1990 (as amended).
Now, local planning authorities can ask a magistrates’ court for a planning enforcement order to authorise enforcement action after the earlier immunity periods have elapsed. The criteria for the grant of a planning enforcement order include deliberate concealment “to any extent” of a breach of planning control.
The effect of the new enforcement powers means that anyone buying a residential property could unwittingly be held responsible for any breach of planning control deliberately concealed by a previous owner. This could, in a worst-case scenario, result in homeowners being forced to demolish a house or unauthorised alterations or additions such as a conservatory.
“While we support the Localism Act in general, one of its drawbacks is that it has introduced additional risk and uncertainty to the conveyancing process and to home ownership, which is precisely what First Title seeks to reduce. We’ve developed our new policy to address this head on,” said Kevin Dick, chief operating officer of First Title Insurance plc.
First Title’s new ‘Localism Policy’ provides an indemnity against loss in value of a home as a result of enforcement action taken pursuant to these new enforcement powers.
The launch of the new policy fits within First Title’s overall objective of developing new products and services aimed at helping solicitors to protect their clients from the risks associated with the purchase and ownership of residential property.
The Localism Policy complements other similar First Title initiatives, such as the Home Owners’ Protection Policy, which was launched in 2010 and which covers a comprehensive list of known and unknown risks, including fraud, seller misrepresentation and boundary disputes.
“It’s difficult to accurately predict the impact on homebuyers of the new powers introduced by the Localism Act, but we believe it has the potential to be significant. At least homebuyers and homeowners now have a tailor-made insurance solution available to them, which is affordable and robust,” added Mr Dick.