Subsidence Advice

cupra20v

Hi

I have owned my ex council ground floor flat (2 story block) for the last 5 years after previously living here for 10 years as a council tenant.

We are in the process of re-mortgaging the property on a BTL mortgage to release some equity to allow us to move to a new property, and subsequently then rent out our flat. We have had a valuation done by Abbey and all came back fine and we have our mortgae BTL mortgage offer in place.

Now we have just been told by our local council that the building is in the early stages of subsidence due to the drains being in a poor state of repair, and next week should hear if their insurance will cover the work or not. We pay a service charge each month as leasholders which includes external work, ground maintenance, buildings insurance etc.

We have noticed that one our internal doors has started to rub/stick presumably first signs, we dont have any cracks or any other signs however.

We are now in a real dilema as to what to do, we have had an offer accepted on a house we wanted to move to, and were supposed to be exchanging this week, but now with this news of subsidence were really unsure as to what to do. We have been assured by the council that naturally they will be sorting out the prob ASAP, they have had a strucutral engineer to check, says they think only needs the drains sorting, no underpinning required, then will monitor for 6 months. This wont affect our premiums for service charges etc we have been told, and some of the flats are still council tenants its in the council interests to make sure the work is done correctly.

Naturally im worried about should we be moving right now, how will this affect future re-sale etc etc, any advice/ thoughts greatly appreciated

TIA

Mozette

I can only think that you should go with what the council say, that they will sort the problem out. It sounds as though they are taking steps to do this, so keep an eye out that they do, but I wouldn't let it put you off your plans.
Just my two penn'orth, but I wouldn't personally be too stressed about it.

lotto-dreamer

keep every bit of correspondence, paperwork etc regarding how the subsidence issue is dealt with and when it has been resolved satisfactorily. Having anything to back up that there was a problem but it was resolved will save you a lot of hassle on subsequent sale - and for any insurance purposes.

cupra20v

Maybe just to clarify one or two things, the abbey mortgage offer was done before we were told of subsidence, so are we under an obligation to notify them now, could this make them cancel the offer?

Most of the postings on possible problems with resale of historical susbsidence problems seem to relate to getting building insurance and subsequently a mortgage offer. As the insurance is done through our council service charge we pay each 1/4, ie we cant insure the property individually the council take care of all of that, would that help / negate possibly issues with resale later?

As was pointed out to me by the council they insure 100's of properties, any increases in premium are shared through out all properties ie there will be no to little increase in premiums.

Mozette

Personally I would assume that the Abbey had checked all this for themselves. Sometimes, subsidence occurs, so long as it is dealt with properly it's fine. It is one of those things that scares people, and it can be catastrophic, but it sounds like this has been caught fairly early and is being sorted. Lotto-dreamer is right though, keep all of the paperwork.

lazygoose

I wish u luck, and hope you don’t get a bill for the work being done.

something the council is good at.

If u r renting the place out, subsidence should not be a problem.

If you are selling it, it will be a problem.

Every bit of paperwork you have will be a red flag to buyers solicitors

that try to talk their client out of buying your flat.

keep it dark. don’t volunteer information. or build a dossier of the problems.

rizla01

Hi,
If you have subsidence then it will be registered for all Insurance Co's to have sight of.

Usually only the insurers that insure the property at present will continue to insure the property. They have to by law.

Problem is, as I see it, is that the value of the property will diminish and I would have expected the Council to acknowledge this and to therfore reduce the purchase price accordingly.

You are about to put 100k+? into their coffers and they would be loath to lose this IMOH, so they should play ball if you threaten to pull out.

I feel that you should NEVER look to a property as one that you will ALWAYS rent out. You never know what is around the corner.

lotto-dreamer

Every bit of paperwork you have will be a red flag to buyers solicitors

that try to talk their client out of buying your flat.

keep it dark. don’t volunteer information. or build a dossier of the problems.

Not quite true - as long as it can be seen to have been resolved satisfactorily it will not be a problem. In this instance it looks as though it will be resolved ok anyway.

Unfortunately, solicitors dig up a lot of information through searches, property information forms etc - so it would be hard to hide. Not to mention that it affects a whole building not just this particular flat. Provided all is ok when it has been sorted out - it should not put off potential purchasers.

cupra20v

We already own the property, we were just lookin to remortgage it to release some equity, to put towards our next house. The property was valued at 95k couple of months back, how much am i likely to lose of its vaulation once the subsisdence is fixed? Bearing in mind also that we have very little evidence of problems in our property other than 1 stickish type door.

We have been told that if the insurance wont meet the costs of fixing then we will be liable for 1/10 of the cost to put right. Initally the think it will only require the drainage to be fixed with a "sheath" type fixture which fits inside or outside of the drainage if that makes sense.

As i mentioned also does it help with for resale that the the building has insurance in place already and will always be done through the council, so no chance of not being able to get buildin insurance, and also i might add at compared to other similiair properties, our service charge is a 1/4 of theirs.

rizla01

cupra20v wrote: »

We already own the property.

Opps, sorry.

That'll teach me to read slower in future.

cupra20v

NP easily done

Do you or anyone else have any thoughts re my points in posting #9 ?

TIA