Subsidence / Stettlement and Selling Houses

Bagelpeter

Hi all

A few years ago I had a claim on my house insurance (Direct Line) for some small cracks fixing on my house, the bricks were simply replaced after being monitored and no further work was needed. I had to pay £1000 excess under the 'subsidence' excess part of my policy. The cause was actually said to be 'settlement' as the property is built on infilled land and I have a certificate of structural adequacy.

I had my house up for sale after the claim and told viewers about this as I wanted to be honest and of course this put people off hugely!

I am currently thinking of putting it up for sale again and some friends and family tell me I'm silly for thinking of telling viewers up front about the claim. Two questions:

As the cause was found to be 'settlement' not 'subsidence' is this classed as different or is it just semantics? ie have I even had a subsidence claim??

Also, are there standard questions that would be sent from a solicitor when selling a house where this will be highlighted or are these claims held on a register somewhere so they will be highlighted to potential buyers anyway?

Many thanks. I do not want to be dishonest, but also I don't want to do myself out of a sale due to a small problem which has been fixed.

Seabee42

There is a question on standard conveyancing forms that asks about

Has any building insurance taken out by the seller ever been

b) subject to high excesses?

Has the seller made any buildings insurance claims?

Give details?

So I suspect you will have to say something down the line but maybe by then they will love the property?

Bagelpeter

Thanks for the reply. I suspected as much, not good news for us. We're currently seeing whether new housing companies will do a house exchange but I guess they too would probably pull out when this information came to light.

Do you know whether this conveyancing form would be filled in, ie before or after a survey was done?

Thank you

Tancred

Bagelpeter wrote: »

Hi all

A few years ago I had a claim on my house insurance (Direct Line) for some small cracks fixing on my house, the bricks were simply replaced after being monitored and no further work was needed. I had to pay £1000 excess under the 'subsidence' excess part of my policy. The cause was actually said to be 'settlement' as the property is built on infilled land and I have a certificate of structural adequacy.

I had my house up for sale after the claim and told viewers about this as I wanted to be honest and of course this put people off hugely!

I am currently thinking of putting it up for sale again and some friends and family tell me I'm silly for thinking of telling viewers up front about the claim. Two questions:

As the cause was found to be 'settlement' not 'subsidence' is this classed as different or is it just semantics? ie have I even had a subsidence claim??

Also, are there standard questions that would be sent from a solicitor when selling a house where this will be highlighted or are these claims held on a register somewhere so they will be highlighted to potential buyers anyway?

Many thanks. I do not want to be dishonest, but also I don't want to do myself out of a sale due to a small problem which has been fixed.

Once you get an insurance company involved you're pretty much screwed because the excess needs to be declared - you can't lie about it because of insurance records etc. What you should have done is got a builder to do the work for you privately.

Bagelpeter

Thanks - I know that now!! Big mistake as the work was so minor it probably didn't even cost them the £1000 excess I paid.

Also, to be clear, I didn't want to lie about it, my question was as subsidence and settlement are different would I have to say I've had subsidence if asked. If the question is about insurance it's irrelevant though.

So a naive decision to get something fixed through insurance 6 years ago has pretty much left my house un-sellable / devalued by about £50K. Great

Seabee42

Surveys are very variable at the moment and it has taken six weeks for me to get the survey done and another two weeks to get the results. Thankfully it is not all this bad.

I would normally expect the solicitors to have acted faster than that.

Obviously one of the things the surveyor comments on is settlement. I do wonder whether its would be worth the expense of getting a survey done yourself so you know what would come up. Not an easy situation best of luck.

Dave_the_Ginger_Cat

Your cerificate of structural adequacy should bode you well in the future. Houses with movement of many types can and do sell, and the most important thing is that this has stopped and been made good.

I would expect that the works did cost more than £1k in total, as there will have to have been some structural engineers/surveyors involved as well as the works itself which does not come cheap

The high excesses question is only relevant if they increased your excess after this claim - the excess you mention is standard.

I have looked at houses with movemement before, and the last one I walked away from because the seller had not carried out any of the recommended works.

It may have lost some value due to this, but don't lose heart.

Bagelpeter

Thanks for the replies

Another factor which complicates things is that there is a huge Ash tree about 5 meters from my property. The tree is protected by the council and so can't be removed. The settlement was found to NOT be due to the tree but I suspect people will still think it is likely to be and this is just something else to put them off.

I suppose all we can do is put it up for sale and see what happens. I just think if it was me, even though the house is lovely inside, I would only buy this house if it was about £50k less than I thought it should be due to the settlement and tree.

Windsorcastle

Hi Bagel, what does the paperwork for the claim actually say? Does it say settlement or subsidence? I would be inclined to think it must have been a subsidence claim because most insurers will not cover settlement.

I am currently selling my place for which I had a subsidence claim in the last couple of years. I didn't meet any of the people viewing the house so the subsidence was not mentioned at that stage. However I had 2 people make offers and when they came round for a second viewing I told them there had been an insurance claim for some cracks caused by trees (which was true, but I didn't use the dreaded 'S' word!). My subsidence was quite minor, just cracks that needed filling and some repointing; no underpinning or anything structural.

I did however make a full disclosure on the Property Information Form (which is what your solicitor will send you to garner all the information about the property). It didn't ask about subsidence, but it asked about insurance claims - I explained it all, that the trees had been removed, the repairs done and that I had a certificate of structural adequacy and a 6 year guarantee from the insurer.

The buyer's solicitor made a big fuss and scared the living daylights out of my buyer that he wouldn't be able to get buildings insurance etc. In fact, he was of course able to insure with my current insurer, as is the norm in these circumstances. The buyer is happy with that.

The only sticking point now if whether the lender will confirm the mortgage offer now that the solicitor has told them about the insurance claim. Hopefully, they will be OK about it, because it is the lender's insurance arm who have agreed to insure it. I'm feeling really stressed in case this fails at this final hurdle but keeping everything crossed.

In short - don't tell people until someone makes an offer and then couch it in the least scary way, explaining the problem is solved etc. And do disclose truthfully on the PIF - they will find out eventually and it's much better to be straight about it from the off. Also, be very calm and matter-of-fact when you're discussing it. If you get worried and make it sound like a big deal, your buyer will get nervous too.

Good luck with your sale - I know what it's like to be in a similar situation.

Windsorcastle

Tancred wrote: »

Once you get an insurance company involved you're pretty much screwed because the excess needs to be declared - you can't lie about it because of insurance records etc. What you should have done is got a builder to do the work for you privately.

Tancred, you are so right! As I know from my own experience. I only wish I had read advice like yours before I made my claim. I would say to anyone, NEVER EVER get your insurer involved for subsidence; get it fixed yourself at any cost. It is just not worth the hassle you will have when you come to want to sell.

Bagelpeter

Hi Windsorcastle

I've just spent a while going through all my paperwork and the report actually says that it is subsidence caused by consolidation / settlement of made ground under the property as it was built on the site of a small former quarry.

I think that's good advice to let the agents do the viewings and not mention until a later date.

Did your subsidence claim affect the valuation of your property and / or did the person who made the offer try to get a discount when they found out? I'm thinking to put it up for sale at the price you'd expect with no claim with a view to being bargained down? I guess the alternative is to put it up at a cheaper price and tell people about it straight away to take away that uncertainty down the line.

I hope your sale goes through, it must be stressful for you, crossed fingers!