First Title Insurance Plc
has launched a new policy aimed at protecting homebuyers from potential exposure from risks that arise following the passage of the Localism Act 2011.
The new policy is designed to protect against the risks from the concealment of breaches of planning by sellers.
The Localism Act 2011, which came into force on 6th April 2012, has created new powers for enforcement of breaches of planning control.
Previously, the Town and Country Planning Act 1990 s.171B said that any breaches of planning control consisting of the building without planning permission or change of use of a property could not be enforced if no action had been taken four years. Any other breaches of planning control could not be subject to enforcement action after 10 years.
As a result of the Localism Act 2011 local authorities can now apply to a Magistrates’ Court for a planning enforcement order. This will enable them to take action against planning breaches after the time limits in the Town and Country Planning Act 1990 have run.
An application for a planning enforcement order can be made within six months of the breach of planning control coming to the local authority’s notice. The order can only be made if the court is satisfied, that the breach has been deliberately concealed, to any extent, by any person or persons.
These new enforcement powers mean that anyone who buys a residential property could find themselves held responsible for any breach in planning control that has been concealed deliberately by a previous owner. The worst case scenario that could result is that a homeowner be required to demolish their property, or extension.
Kevin Dick, Chief Operating Officer of First Title Insurance Plc commented:
“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.”
The new policy from First Title, the ‘Localism Policy’ provides an indemnity against loss in value of a home as a result of enforcement action taken using the new enforcement powers. It complements other similar First Title initiatives, such as the Home Owners’ Protection Policy which covers known and unknown risks including fraud, seller misrepresentation and boundary disputes.
Kevin Dick added:
“It’s difficult to accurately predict the impact on homebuyers of the new powers introduced by the Localism Act, but we believe that 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.”
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