Exchanging soon and building insurance problems!

belisha-beacon

We were due to exchange on a house very soon and we had a provisional building insurance quotation in place to be activated when we had an exact date. The mortgage will only be released if we have building insurance. However, since we originally agreed to buy, some potential structural faults were discovered by our surveyor although the bank's surveyor did not flag this up and was happy that the house would be suitable for a mortgage. We got a structural engineer to report on the house and the work does need doing but is fairly straightforward from his point of view and could be done quickly once we complete, and before we move in.

We felt that we had to tell our insurers to make sure that we were properly covered in the event that anything happens during the work to fix these faults and they are now rethinking whether to offer us insurance at all. We've sent our structural engineer's report and they might ask for a higher premium but our broker says that the likelihood is that they will only insure us after the work is complete. This would mean that we could not buy the house at all because our mortgage will fall through if there is no insurance from the point of exchange. From any of you out there with experience of this sort of thing, can you suggest any insurers who will insure buildings with known structural faults that are going to be fixed? We don't mind a higher premium or perhaps buying short-term insurance which can be renewed after the work is done, or any sensible suggestions about a way forward really!

The faults relate to a wall which has been built in the property to create a bathroom where it used to be open-plan - this is not supported by an equivalent wall in the basement and there is also a removed chimney breast in the basement. There is evidence that the middle floor has started to sag and the structural engineer says that it definitely needs to be done but it just involves the insertion of two RSJs. He also needs to put a bracing timber in the roof since that has been removed in the past. This work can be done quite quickly and we have budgeted for it (just under £2,000)

I would really appreciate any advice, of course it is possible that our current insurers will come back with a positive quotation but since we want to exchange quickly I'd like to get back-up plans in place in case it doesn't happen!

Just to clarify - we have had money knowcked off the price of the house to pay for these repairs and the inconvenience to us etc. The seller does not want to do the work herself and we accept her reasons and are happy with the deal we've negotiated. We're very specifically wanting to know about any possible insurance options for this situation, please?

Catatonia

Who is providing building insurance to the current owners? Have you tried asking them?

G_M

Many insurers, especially the cheaper online, bog-standard policies, will not cover building with structural movement, subsidence or the like.

You may need specialist insurance. Approach a broker or do a google search 'specialist buildings insurance '

These guys recently helped me with a non-standard policy, and were still competitive.

paulsad

Think I'd get the sellers in on this quick.
Be in the sellers interests to get these rsj's in place asap so they could get the work started pronto and the structure made sound.

spendapennyortwo

Surely it's up to the current owners to fix the problems before you move in?? I'd go with the advice from G_M.

G_M

spendapennyortwo wrote: »

Surely it's up to the current owners to fix the problems before you move in??

Only if that's what the OP agrees with them.

The vendors might not want the hastle/disruption of work in the house while they still live there and prefer to knock something off the price, or they might say the price already reflects the condition and it's "take it or leave it".

geoffky

not your problem...get the sellers to worry or walk away...millions of houses for sale without problems

belisha-beacon

Thanks for all the replies. We've already asked the seller to put the problems right and she has said no, mainly as she is worried that we will walk away after she has paid out all the money and she needs a quick sale. Our mortgage valuation did not raise the problems so I guess she is feeling that future buyers might not notice the issues, they are not visually obvious and we only know because we had a full survey. Instead, we have negotiated a substantial deduction on the house price which is more than twice the estimated cost of repairs, to compensate us for the inconvenience etc. We are happy with this, we are living in rental property and have budgeted for continuing to live there whilst the house is fixed. We also trust our surveyor, he is great, and he thinks that the work is essential, but also straightforward to do. The work is also fairly cheap in the scheme of things.

My question is very specifically about how I can get insurance for this situation. We've weighed up all the pros and cons and are happy to proceed with the purchase. Any other suggestions for specialist brokers etc would be great! Thanks.

RAS

Can you give the insurers an idea of the timescale involved in geting the RSJs in place? I know friends initially whacked in temporary support and acro-props immediately after purchase and then got the builder in (they were not even allowed to move into the house until the three story chimney stack was sorted out; the previous owners having removed the ground floor section).