The vendor, the agent, the bank and the subsidence problem...

BertieBoo

Hi Great Site!
My first post and I am asking for your advice please:
My partner and I (FTB's) registered with an estate agent to buy a house in SW London and asked him to let us know as soon as anything came on their books to our spec on a particular grid of streets.
A couple of months later in April this year the agent called us and told us we had first dibs on a house he thought would satisfy our criteria. It did. Our offer was accepted.
We had a compulsory bank survey done similar to a homebuyers - it cost us 400 quid and we got a little report back saying nothing in particular. We considered structural survey but having thoroughly examined the house ourselves, and given there was nothing untoward in the bank survey we didn't bother. (an error never to be repeated)
Last week, a couple of days before our anticipated exchange date our solicitor received a 4 page long report from loss adjustors from I presume the vendors insurance co. confirming work that had been done on the house earlier this year to a fix subsidence problem caused by a root. Every room in the house had been affected (3 bedroom terrace) and the whole house had to be essentially glued back together with epoxy resin + new windows and a nice paint job inside and out. (no wonder we could see no problem with the house it looked gorgeous superficially). I have so many questions about this from why was the house affected all over by a localised root problem to why was it not underpinned to what are the insurance implications. Needless to say these questions will go unanswered as we are 99.9% sure we are going to walk away despite the estate agents protestations that there is nothing wrong with the house.. something that may be true today but not in a few years time.

Our solicitor was told by the vendors that they had given the agent this info when they put the house on the market. The agent says he knew nothing about this...but found the info on file.

I have 2 questions for you all...as were we not told about the problem from the beginning, is this fraud? - should the agent get away with it?
Secondly when I asked for my money back from what I thought was a misleading survey (the property is clearly not worth what the bank's surveyor said and I suspect he did a first gear survey i.e drove past in...+ no mention of a recently fixed subsidence problem ) and said I have been ripped off paying 400 quid for a shonky survey, the bank said the surveyor had done his job and no chance of refund.

Should I cut my losses and move on thankful that I didn't pay the going rate for a lemon of a house, or should I pursue the agent and the bank?

Thanks in advance for any of your thoughts.
BertieBoo

cattie

Not too sure of the legalites, but if the survey you paid for was compulsory for the lender to consider the mortgage, then the survey was actually carried out on behalf on the lender & not you.

It is more usual to have to pay a lender for a valuation survey & if you want anything more such as a homebuyers survey then you pay this on top & the survey is carried out on your behalf at the same time that valuation survey is done.

BertieBoo

Thanks Cattie - I will check this out. It was bank valuation + report for us.
To be honest I have calmed down now -am so relieved that problem was found out before we exchanged - we feel very lucky. I think the agent behaved apallingly to withold that info. Our issues are v.minor compared to the vendor's.
Hubby and I have been talking - we have decided against looking for another place - we'll continue renting until housing market is a bit more certain or house prices drop a bit more + save more deposit. I'm heading to the investment pages now to see where the best place for our deposit is!

Astaroth

If it is what the bank did then it is a simple v.aluation survey which is 99% how much is the property worth and not as detailed as a homebuyers survey and nothing like a structural survey. As cattie also says he was under instruction from the bank and not yourself so even if you had gone for a "proper" survey then you would have no direct comeback against the surveyor

An estate agent works for the seller not the buyer. They are under no obligation to give any negative information out about the property unless directly asked - arguably to do so would be a breach of contract with the seller - but if asked a direct question they must give an answer which is true to the best of their knowledge and should highlight the limitation of their knowledge.

Seems that you have just been somewhat unlucky and found the risk of not having your own survey done but at least your solicitor found it now rather than after you have exchanged.

F_T_Buyer

Unfortunately you're going to have to give up hope of a refund.

EAs can get away with pretty much anything at the mo, and this is why I think HIPs (Home Information Packs) will be a good thing. This is mostly why EAs (mainly the NAEA) is dead against HIPs, it means they can't find vital info, as was in your case.

In future, make sure you get a mortgage lender + surveyor that has no link what so ever to the EA. Also, get a homebuyers survey done (until HIPs has come in).

zzzLazyDaisy

A HIP wouldn't have helped OP - subsidence isn't one of the issued included.....


http://www.mailonsunday.co.uk/pages/live/articles/news/news.html?in_article_id=391125&in_page_id=1770

F_T_Buyer

zzzLazyDaisy wrote:

A HIP wouldn't have helped OP - subsidence isn't one of the issued included.....


http://www.mailonsunday.co.uk/pages/live/articles/news/news.html?in_article_id=391125&in_page_id=1770

Subsidence may be included in HIPs at a later date:

c) A new `ground stability and subsidence` search is being developed by the DTI, the Coal Authority and the British Geological Survey. This will cover coal mining, natural subsidence and Cheshire brine initially but could be expanded later to cover other mining activities (e.g. Cornish tin mining). The new search would be potentially relevant on a nation-wide basis. Subject to a satisfactory outcome, the Board recommended that this new search should be `authorised` for inclusion in Home Information Packs. It was noted that this search could eventually contain information relevant to all transactions, at which point it could be `required` to be included in Home Information Packs.

http://www.homeinformationpacks.gov.uk/hip_recommendations.aspx

Eitherway, HIPs is a start. But it needs to go much further.

Jorgan_2

BertieBoo wrote:

I think the agent behaved apallingly to withold that info.

If the vendor doesn't tell the Agent selling the property about the issues relating to the property, the agent can't be to blame. If the agent was aware and you asked them a specific question about the property, which they do not answer honestly, then you would have some come back on the agent.

HIPs may well have helped the OP in this case as some of the issues may have shown up in the home condition report. The subsidence issue in this case may never have been picked up, even with proposed future legislation, as it was caused by a tree root not a mining issue.

The reason many agents are against HIPs, is because the feel it is a poorly thought piece of legislation. It will cost more for people to move and it doesn't take any uncertainty out of the process as either party can withdraw at any time without redress. There is also the issue of the number of qualified Home Inspectors, will there be the 7500 the government claims are required?

courtjester

I agree with Jorgan - HIPs will do little or nothing to improve the quality of the buying process and are more likely to cause difficulties owing to the extra requirements imposed. The addition of a mining /subsidence search - oh god no! If that is anything like the current searches, that simply means that if there has ever been a mine shaft within 1000 miles of the property it will highlight it as a high risk property, just to cover the backs of the search providers.

To cover a point originally raised - why no under-pinning of the property, that is doubtless covered in the report from the loss-adjuster and will be because the identified cause of the subsidence (tree root) was removed. Subsidence has many potential causes, but the presence of a tree sucking moisture from the soil is quite common in certain soil types (shrinkable clays). When the tree is removed from the situation, or controlled as appropriate, the ground rehydrates and moves back into place, closing cracks - epoxy resin bonding is probably stronger than the original mortar and once the repairs are redecorated, the property is effectively back to normal.

Subsidence would only then reoccur if the original causation is allowed to develop again, so it is relevant to consider whether the remedial action was effective on a long or short term (i.e if a tree has been removed, that's it. If it has been reduced, future maintenance would be required to prevent the tree growing to the point that damage occurs again).

Under-pinning is generally a last-resort course of action only required if the foundations have been damaged to the point of being incapable of supporting the building or if external causes cannot be reliably removed or improved. During the 70's thousands of properties were under-pinned unnecessarily as the "repair of choice" due to lack of research into the problem - it's not always a correct 'fix' and can lead to other problems.