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Potentially contaminated land - get indemnity insurance?
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Oranjeboom
Posts: 81 Forumite
Hi All,
This is a post on the issue of getting an indemnity policy for a house that sits on 'potentially contaminated' land. I've got some backgound info on this saga or just skip to the section in bold below!
Very briefly, we are looking to buy a house that just come back thru the searches as being potentially contaminated. The main reason for this being is that the land that the house sits on was formerly owned by an 'industrial' company. They essentially owned all the land in the area (since 1930s) and then sold the plot in the 1950s when the new owner built the existing house on there. Between the 1930s to when the house was built on (1952 to be exact) the land was semi-agricultural (aerial phtography reveals that some years it was ploughed whereas other years it was just scrubland). The 'industrial' company produced precision tools but is now defunct and has been replaced by car workshops etc. So the land itself has not seen any industry on there itself, but of course there is potential that back in the 1930s it could have been used as a dumping ground for chemicals, scrap metal etc. And of course, contaminants could have leached across boundaries. So there is potential for contamination.
I had a referal done and RPS duly provided the report. The result was that it is on the councils list of 'sites to check' and therefore we don't have a clean bill of health. I've spoken to the council and it will take them decades before they make it to this property.
My options:
1) walk away now
2) From a personal view, my preference is to know whether it is contaminated and I am inclined to have a full intrusive investigation done (Phase 2) which could take many months to determine water flow over the seasons. I don't have time for that and don't want to lose the property.
3) Do a phase 1 study (desktop survey with some ground level sampling) which will cost approx 2k but can be done in about 3wks
4) Get indemnity insurance (which I think the lender will go with...if they don't reject us completely on this property!). How does this work though? Does this only cover the lender if in future it's evident that the land is contaminated and we stop making our mortgage payments (i.e. covers this shortfall when the house value drops as a result of the confirmed contamination). Or does it also cover us, in the event that we end up having to deal with the contamination and the remediation costs?
At the moment I am inclined to go with the indemnity route and then down the track do a Ph2 survey to know either way. A riskier approach, but it means we get the house and are also (I believe) covered under the indemnity insurance if it turns out to be nasty.
So I'm just after confirmation how the indemnity policy works. Solicitor says he will look into that once he hears back from the lender...I need to know before that decision.
PS No, the owners did not die of lead poisoning!
OB
This is a post on the issue of getting an indemnity policy for a house that sits on 'potentially contaminated' land. I've got some backgound info on this saga or just skip to the section in bold below!
Very briefly, we are looking to buy a house that just come back thru the searches as being potentially contaminated. The main reason for this being is that the land that the house sits on was formerly owned by an 'industrial' company. They essentially owned all the land in the area (since 1930s) and then sold the plot in the 1950s when the new owner built the existing house on there. Between the 1930s to when the house was built on (1952 to be exact) the land was semi-agricultural (aerial phtography reveals that some years it was ploughed whereas other years it was just scrubland). The 'industrial' company produced precision tools but is now defunct and has been replaced by car workshops etc. So the land itself has not seen any industry on there itself, but of course there is potential that back in the 1930s it could have been used as a dumping ground for chemicals, scrap metal etc. And of course, contaminants could have leached across boundaries. So there is potential for contamination.
I had a referal done and RPS duly provided the report. The result was that it is on the councils list of 'sites to check' and therefore we don't have a clean bill of health. I've spoken to the council and it will take them decades before they make it to this property.
My options:
1) walk away now
2) From a personal view, my preference is to know whether it is contaminated and I am inclined to have a full intrusive investigation done (Phase 2) which could take many months to determine water flow over the seasons. I don't have time for that and don't want to lose the property.
3) Do a phase 1 study (desktop survey with some ground level sampling) which will cost approx 2k but can be done in about 3wks
4) Get indemnity insurance (which I think the lender will go with...if they don't reject us completely on this property!). How does this work though? Does this only cover the lender if in future it's evident that the land is contaminated and we stop making our mortgage payments (i.e. covers this shortfall when the house value drops as a result of the confirmed contamination). Or does it also cover us, in the event that we end up having to deal with the contamination and the remediation costs?
At the moment I am inclined to go with the indemnity route and then down the track do a Ph2 survey to know either way. A riskier approach, but it means we get the house and are also (I believe) covered under the indemnity insurance if it turns out to be nasty.
So I'm just after confirmation how the indemnity policy works. Solicitor says he will look into that once he hears back from the lender...I need to know before that decision.
PS No, the owners did not die of lead poisoning!
OB
0
Comments
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I believe that once you have notified the council you will not be able to get indemnity insurance.
Do you know if this flagged up when the current owners purchased the property?0 -
I believe that once you have notified the council you will not be able to get indemnity insurance.
Do you know if this flagged up when the current owners purchased the property?
Sorry, notified the council of what? Its on their list of properties that they need to look at as to them it's 'potentially contaminated'.
Current owners lived there since it was built in the 1950s...when current legislation did not exist, so this issue has only arisen now.0 -
What is it you are worried about?
That you will be living on dangerous land that could affect your health?
How can an indemnity policy help protect your health???0 -
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What is it you are worried about?
That you will be living on dangerous land that could affect your health?
How can an indemnity policy help protect your health???
Well, yes, there is a concern that if contaminated this would affect my health. My intention is therefore to have further investigations done prior to me growing vegetables or me eating the soil.
Obviously the indemnity will not cover my health, but it will certainly cover me for remediation works if necessary.0
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