Rcovering Costs from Neighbour's Breach of Building Regs

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Somerset
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We live in a late Victorian terrace house on the side of a hill. Over the years the outside buildings have been converted into a galley kitchen (all as from house down back garden) down the left hand side with covered utility in centre and right with outside toilet in right hand corner adjoining the house. Our galley kitchen wall is our property and is on the uphill side and the drop is about 18 inches.

When out builder cut into our wall to embed a flitch beam he discovered he was actually knocking tiles off the neighbour's kitchen wall. It would appear the neighbour (3 owners previous and probably 7 year ago) had built his kitchen extension without having applied for planning permission and, we now know, failed to comply with any compliance issues. Substantially he had built the wall up using battens, plasterboard and then tiles. On the outside he had tucked lead flashing under the tiles top and bottom leaving his tiles floating and unsecured.

Our builder told us about it and called building control who came to inspect it. The inspector declared it as unsafe and told us they knew nothing about this build. Our neighbour was asked to join us and the failings shown her and the inspector told her this was a breach which he would seek her to remedy immediately. We discussed s.36 and injunctions and he would need advice from the LA legal department about enforcement. Our new neighbour said she would get it fixed immediately and asked our builder if he would do the work as he had the scaffolding tower up and could do the work immediately, without access issues. Our builder indicated the cost of the work and she agreed this outline figure subject to further discovery during the work. Further problems were discovered with insulation and locking the end down. However, the work has been done and building control have expressed satisfaction with the work. Our project is now complete and looking wonderful. We have paid our builder for all works and now seek to recover from the neighbour.
When she purchased the house she took benefit of an indemnity insurance policy for just this lack of compliance. She wrote to her insurer in really the wrong tone and they have repudiated the claim saying no s.36 notice or injunction had been served. We argue that she consented to the work to avoid enforcement and therefore is covered. and the LA agree, commenting that our costs are very reasonable.
Of course we want to be good neighbours but we are out £3.5k and seek repayment. Anyone got advice on how we go about this without massive legal costs? please.
 
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Unfortunately her insurer may be acting within the terms of her policy if she didn't actually get served with a notice/injunction. The best thing to have done would have been to have allowed a notice to be served and then made the claim. Can the council issue them retrospectively? (Probably not, but might be worth a shot?) Do you have the inspectors initial findings in writing, and if not can you get them from the inspector? You said "the inspector told her this was a breach which he would seek her to remedy immediately" - if she can get that in writing then she may be able to explain that she believed it was an instruction to act immediately and that she believed it would be covered under the insurance terms.

Do you, or your neighbour, have legal cover on any insurance products (car insurance and bank accounts often come bundled with it). If so give them a call and ask for advice.

If it can't be sorted with the insurer and she won't pay up herself then you might need to take court action to recover your costs. Obviously that will sour relations somewhat.
 
While researching this I have bumped into much arcane legal jargon.

It is inherent in the indemnity policy that the insured keeps the existence of the lack of planning permission secret from everyone.

We "discovered" both the lack of BR permission and shoddy state of build when the neighbour screamed at being bombarded with tile shards. Therefore s.36 can only be enforced within one year? but from discovery? or when? the alternate would be an injunction which we are told is contrary to public policy except where communal building is involved.

The building control inspector has file notes recording the conversation had on site and accords with both mine and my builders recollection. The view is her assent to getting the work done immediately obviated the need to serve - but the work was signed off at a subsequent meeting.

We do indeed have legal advice added to our endless other accounts and will take advantage of this freebie.

With litigation getting up and running incurs such costs that have to be recovered - so a kamikaze mentality sets in quickly. Our legal costs would outweigh the sum sought rapidly and we would prefer a sensible underwriter just make a contribution. Of course our counterparty is our neighbour and her insurer none of our business - except they will take over the action.

Oh yuck.

I much appreciate your wisdom to date.

best wishes

Stephen
 
The issue is between you and the neighbour. They agreed to works so your claim for costs is now against them. The issue between the neighbour and the insurer is nowt to do with you. Put together a claim and serve it on them. Get the ball rolling.
 
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Your neighbour knew as little about the existence of problem as did you, and when it came to light she seems to have behaved very reasonably, not blaming your builder for the tiles coming off and agreeing to have the problems fixed as expeditiously as possible.

She seems a reasonable person who wanted to do the right thing, and whilst she obviously thought she was insured, but now it turns out possibly not, is there any indication that she is therefore refusing to pay?

What happens when you speak to her and say "I'm sorry, but your insurance problems are nothing to do with me - I paid out £3,500 for your extension to be rebuilt, and I must get that back."?
 
Our new neighbour said she would get it fixed immediately and asked our builder if he would do the work as he had the scaffolding tower up and could do the work immediately, without access issues. Our builder indicated the cost of the work and she agreed this outline figure subject to further discovery during the work.

So the matter is between your builder and the neighbour.

Why did your builder include the neighbour's works on your bill and why did you pay this?
 
I'm struggling to get my head around this.

It sounds like the previous neighbour has built an extension butting up to the flank wall of your outbuilding. If it has been there for 7 years I would suggest this wall has now become a party wall by enclosure. I would urge caution as if this is the case it could backfire on you in a big way. How did your builder not realise there was a building on the other side of the wall before he started knocking holes in it?

As for the indemnity insurance. I was under the impression that these policies only cover the cost of legal expenses in connection with enforcement action by the local authority. I did not think they cover the cost of remedial works but I may well be wrong on that.
 

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