Purchasing a property with subsidence due to a tree.

Tom_Beard

My girlfriend and I have had an offer accepted on a detached Victorian house. Since the offer was accepted we have undertaken a structural survey as per the request from our mortgage provider, due to a small crack on the front facade above the bay window. The survey took place on Friday so we still await the official report, but whilst chatting to the surveyor he pin pointed the issue to a tree stump directly under the bay window, which had been cut down some time ago. The tree stump was circa 10-15 cm in diameter. The surveyor noted that due to the age of the building, the tree stump and roots would have affected the shallow foundations of the bay window, which has resulted in subsidence under the bay (dropping it slightly in one corner) creating the small crack on the front facade. The repair approach we discussed seemed to be very reasonable, a small underpin to the corner of the bay and fill the crack.

As the property now requires under pinning and the surveyors report will highlight subsidence, we are concerned that we will have issues securing our mortgage, and also encounter issues with building insurance and selling the property in the future.

The remainder of the property is structurally sound and in good order, and there is no visible ground movement in any of the neighbouring properties. All local searches have come back positive.

We would be grateful for any advise on this situation.

Thanks in advance.

chewmylegoff

Tom_Beard wrote: »

My girlfriend and I have had an offer accepted on a detached Victorian house. Since the offer was accepted we have undertaken a structural survey as per the request from our mortgage provider, due to a small crack on the front facade above the bay window. The survey took place on Friday so we still await the official report, but whilst chatting to the surveyor he pin pointed the issue to a tree stump directly under the bay window, which had been cut down some time ago. The tree stump was circa 10-15 cm in diameter. The surveyor noted that due to the age of the building, the tree stump and roots would have affected the shallow foundations of the bay window, which has resulted in subsidence under the bay (dropping it slightly in one corner) creating the small crack on the front facade. The repair approach we discussed seemed to be very reasonable, a small underpin to the corner of the bay and fill the crack.

As the property now requires under pinning and the surveyors report will highlight subsidence, we are concerned that we will have issues securing our mortgage, and also encounter issues with building insurance and selling the property in the future.

The remainder of the property is structurally sound and in good order, and there is no visible ground movement in any of the neighbouring properties. All local searches have come back positive.

We would be grateful for any advise on this situation.

Thanks in advance.

has the existing owner claimed on their insurance- is the insurance company in the process of correcting the subsidence, or is it something which has only just been identified.

if it's the former, then your issues are (a) you will probably only be able to get buildings insurance in the future through the insurance company that the seller is using, and therefore may be forced to pay over the odds for buildings insurance; and (b) you would find it more difficult to sell the property in the future as the word "subsidence" will often put people off, especially when there has been underpinning. of course there is also (c) which is that you will have to accomodate the insurance company's monitoring of the subsidence and the repair works - usually insurance company will monitor cracks for several months at the very least, possibly much longer, before making good the damage.

if no insurance claim has been made i am not sure what the position would be - it seems to me that the seller would need to make a claim, get the insurance company to confirm they will make good, and pay the £1,000 excess (standard for subsidence claims) to the insurance company. the insurance company will also need to confirm that they will continue to provide you with buildings insurance after you purchase.

if the seller won't do that then i think you probably won't be able to proceed with the purchase as either (i) you won't be able to get buildings insurance which is a requirement if you have a mortgage and (ii) you would be able to get buildings insurance but it wouldn't cover the historic subsidence situation and therefore it would logically follow that you still wouldn't be able to mortgage the place. i should make it clear that i'm just guessing on the last two paras really.

personally i wouldn't bother with it, unless you are getting it for massively under market value for a similar property without these issues.

Tom_Beard

To my knowledge no insurance claims have been made on the property for subsidance. The property has been vacant for approximately 1 year following its reposession. If no claims have been made does this make a difference with regards to insurance?

As it is repossessed, would the repossession company carry suitable insurance on the house to undertake a repair - I suspect not.

Do insurance companies take a different view on subsidence if the movement in the ground is recent and due to a tree stump that was planted against the wall, over subsidence due to ongoing earth movement in the neighbourhood?

We are both keen to progress with this property, so just leaving it in our eyes would be the easy option, plus we have already spent a couple of grand to get to this point. So we need to seriously consider the pro's & cons of progressing this sale. It is our intention to live in this property for many years, so if we were to complete I would be grateful to know what the approximate insurance uplift would be for the annual premium (if we can get a ploicy) ?

Also just out of interest, how do people know you have under pinned your property? Would we have to register this repair with the building control officer?

CloudCuckooLand

No ordinary insurer, other than the one insuring it at the time the subsidence occured, will touch this.

There are specialists, but expect them to be expensive. And it would need to be the mother of all bargains to be worth the risk that something else will be discovered after you have bought it.

It is the vendor's problem. Let them fix it. And ensure continuation of cover, access to all reports etc, if you decide to go ahead.

If they don't, don't buy it.

chewmylegoff

Tom_Beard wrote: »

To my knowledge no insurance claims have been made on the property for subsidance. The property has been vacant for approximately 1 year following its reposession. If no claims have been made does this make a difference with regards to insurance?

yeah. there is a chance that you are not going to be able to get buildings insurance, because when you phone up you will have to tell them that the house needs underpinning and they will either decline cover all together, or decline to cover subsidence claims. you won't be able to progress the sale if you cannot get insurance.

As it is repossessed, would the repossession company carry suitable insurance on the house to undertake a repair - I suspect not.

well, the property is now owned by a mortgage company. i suspect they have a blanket insurance policy to cover repossessed properties. i am only hypothesising though so no point in me speculating about what they might be prepared to do. one point is that if there is an impasse (i.e. a buyer cannot get insurance) they will not be able to sell the property to anyone, so maybe they will sort it out. your solicitor will be better placed to tell you what's what than anyone here is.

Do insurance companies take a different view on subsidence if the movement in the ground is recent and due to a tree stump that was planted against the wall, over subsidence due to ongoing earth movement in the neighbourhood?

well it has been determined here that the house needs to be underpinned. whether or not there is any ongoing movement is something they will want to establish before fixing it.

We are both keen to progress with this property, so just leaving it in our eyes would be the easy option, plus we have already spent a couple of grand to get to this point. So we need to seriously consider the pro's & cons of progressing this sale. It is our intention to live in this property for many years, so if we were to complete I would be grateful to know what the approximate insurance uplift would be for the annual premium (if we can get a ploicy) ?

impossible to say. the main problem is that you are tied to one company and therefore cannot switch provider to keep your costs down in the future if they start increasing the premium wildly. you're probably best off ringing up an insurance company and asking them if they will cover it, as only they can tell you. it may be that the insurance company who was covering the person who got repossessed may continue to provide cover, dunno, you'll have to find out who it was if you can and ring them.

i had a house with subsidence which didn't need to be underpinned. the previous owner had made a claim, and the repairs were done 18 months after the claim was made, by which time i owned the house. his insurance company did cover it, but the cost was about 25% higher than the cheapest buildings insurance that i could have got elsewhere (although that said, that was only checking against online quotes, and the quotes were standard quotes not made in the knowledge that the house had had subsidence issues).

interestingly, my builder said that he didn't believe that it was subsidence at all, and that the damage was at least 50 years old. he went up in the roof and opined that the roof had been replaced at some point and it was his view that it had been blown off in the second world war. i digress!

Also just out of interest, how do people know you have under pinned your property? Would we have to register this repair with the building control officer?

when you come to sell it, you will get a questionnaire from the buyer's solicitor asking you a load of questions about the property. one/several of them will be about subsidence, so you will have to disclose at this point.

when i sold, my agents advised not to disclose the subsidence issue up front, but that was because it was very minor and there was no underpinning. not sure whether it would be better to be upfront with an underpinning issue as it's more serious.

olias

OP, have a read of this report, there are options, it's not all doom and gloom as some posters would have you believe.

http://www.guardian.co.uk/money/2010/feb/08/subsidence-home-insurance-quotes-soaring

Olias

chewmylegoff

CloudCuckooLand wrote: »

No ordinary insurer, other than the one insuring it at the time the subsidence occured, will touch this.

There are specialists, but expect them to be expensive. And it would need to be the mother of all bargains to be worth the risk that something else will be discovered after you have bought it.

It is the vendor's problem. Let them fix it. And ensure continuation of cover, access to all reports etc, if you decide to go ahead.

If they don't, don't buy it.

i agree with this. practically speaking, they aren't going to fix it any time soon, it will take several months (if they even agree that it should be fixed at all), so probably best to move on.

Tom_Beard

We have just received the structural report back from our surveyor, it reads as follows - I'd be grateful for any advise on how our proposed mortgage lender and building insurers we interpret this;
　
"During my investigation I noted cracking to the brickwork at 1st floor level and to the brickwork below the front bay at ground floor level. The brick lintels around the bay were all showing signs of movement. Internally, there were o corresponding signs of movement showing through the wall coverings.

Within the front garden area there were a number of mature shrubs, some of which were located adjacent to the front wall/front bay of the property. There was a tree stump also in close proximity to the front bay.

The property is known to be situated where there is a clay subsoil and it is my option that the roots from the above mentioned vegetation have extended beneath the foundations causing the clay to shrink and the foundations to subside. The result is the cracking to the superstructure which is now evident.

This type of damage would usually be covered under the subsidence section on the building insurance policy.

The usual course of action would be to remove the offending vegetation and allow a period of time from the foundation to stabilize prior to carrying out robust superstructure repairs. The repairs would be in the form of resin bounding to the fractured brickwork and inserting stainless steel Helibars within the mortar joints. this would effectively regain the structural integrity of the main brickwork and brick arches. The cost of the repairs would be in the region of £3000 = VAT plus scaffolding.

In the unlikely event that stabilization cannot be achieved by vegetation control, underpinning would be required. However, from my experience I doubt if this will prove necessary. It is essential that you obtain full buildings insurance on the property prior to exchange of contacts. the cover should include for all perils, including subsidence, heave and landslip. I enclose a list of specialist insurance companies who may be able to assist in provided cover."

CloudCuckooLand

A lender may proceed with a retention I suppose. Have you spare funds ?

Unless specialised, i.e. expensive, insurance is sought, you will get no insurance with a report like that.

You should get the existing insurer to deal with this, and seek continuation of cover should you proceed to buy.

Although, as the problems could take months to be seen to be cured, you may well have decided to buy something else by then.

Surveyors are only human. What if they have made a mistake ? Can you afford to take them through the courts to prove negligence if the place has further problems ?

Even if they are right, if the remedial actions are over-efficient, it will suffer from heave...

If tens of thousands under market value, it may be worth a punt. I would not.

Keep looking, come back to it in a year's time when fixed...