Subsidence and insurance - Buying a house

kaisertwo

Hi
I am in the process of purchasing a house in an area in which there has been a history of coal mining.

The coal mining searches (non obligatory) have come back and have shown that mining ceased in 1968 in the area. However in 1988, 1990 and 1996 there were claims against the coal board for subsidence.

The first two claims were paid by the coal board but the 3rd refused on the grounds of them stating that there would be no problems from mines after 20 years. I am guessing they were lenient for the second claim.

I have seen full details of the claims and with the exception of a single storey attached garage requiring the floor rebuilt, it appears that the majority of the work was of a cosmetic nature. I may be blinding myself, and not being sensible, but I have visions of many households in the area thinking, for example, “the living room needs decorating, should we put in a claim”.

The current owners bought the house in 2007, from the previous claimant, at the top of the market in this area, and I am buying at a rate 25% more than they paid. The house is not remarkable but the views are. Compared to other houses in the road I am paying a 15% premium for that.

They have not made any claims themselves AFAIK and did not mention to me anything around these claims until I made it clear I had conducted mining searches.

Through my solicitor I am going to go back to the current owners and ask:-
• What gave them the confidence to buy the house, what checks they took?
• Who they are insured with, at what costs per year, and have they notified the insurance of the claims? I did an insurance quote check on a random pretend address in the area with and without details of subsidence. The latter bumped the price threefold and only 1 of the previous 85 ‘quoters’ agreed to insure.
• If , for example , they now made a claim, would the insurance company know that there were claims made through the coal board. Would they nullify the current owner’s insurance if they have not notified them of the claims. For clarity I do not wish to follow the same path but do wish to understand. Would the insurance companies have access to coal mining records such as those I have mentioned?
• Would they be willing to fund the services of a check of a structural engineer, instructed by myself and to provide me a copy of the report, to look at the current state of the house and also to advise on suitability of any future extensions I'd like.

I am also going to talk to my surveyor. Is there anything else I should do?

Is there a time period in which claims for subsidence are no longer deemed relevant by insurance companies? Do they accept, for example, there’s been nothing to note in the last 20 years so we can accept ‘currently’ there are no problems. Hence my comment about employing a structural engineer.

I am not totally put off by the cost, perhaps I am a fool for this, but would not like to buy future problems. That said I wonder if I now have room for price negotiation?

I am off to work now but will try to get back on throughout the day to respond to any comments. Thank you ever so much for any advice.

anselld

As a vendor my response would be ... make your own enquiries at your own expense.
Assuming the vendor has answered all the PIF questions honestly you are unlikely to get anything more useful except a larger legal bill.

kaisertwo

anselld wrote: »

As a vendor my response would be ... make your own enquiries at your own expense.
Assuming the vendor has answered all the PIF questions honestly you are unlikely to get anything more useful except a larger legal bill.

Thank you. I take your point although I would also think that the vendor would benefit from the structural engineer report in their attempts to sell the house should I pull out. It can be used to satisfy future buyers.

I'm unsure about the contents of a PIF. I have yet to see this, is it obligatory and I am assuming they would be liable to disclose what the mining report has found?

I will ask my solicitor to forward this. Thanks again

Annie1960

Are you a first time buyer? You sound like one.

Are you buying in England/Wales (things are different in Scotland)?

If in England/Wales, it is the buyer's responsibility to instruct and pay for the surveyor. The surveyor will advise if a structural engineer's report is necessary, and it will be for you to decide whether or not you want this, and therefore you pay for it.

It is very good to see you using due diligence and thinking through everything you need to ask before exchanging. There are threads on this forum saying things like 'Help, I didn't bother getting a survey done before exchange, and now I've moved in I've discovered the house needs very expensive urgent structural work to make it safe.'

You are in a better position than these people.

Hopefully you have found a good local solicitor (not one recommended by the EA), and they will advise you of what is normal for a mining area.

kaisertwo

Annie1960 wrote: »

Are you a first time buyer? You sound like one.

Are you buying in England/Wales (things are different in Scotland)?

If in England/Wales, it is the buyer's responsibility to instruct and pay for the surveyor. The surveyor will advise if a structural engineer's report is necessary, and it will be for you to decide whether or not you want this, and therefore you pay for it.

It is very good to see you using due diligence and thinking through everything you need to ask before exchanging. There are threads on this forum saying things like 'Help, I didn't bother getting a survey done before exchange, and now I've moved in I've discovered the house needs very expensive urgent structural work to make it safe.'

You are in a better position than these people.

Hopefully you have found a good local solicitor (not one recommended by the EA), and they will advise you of what is normal for a mining area.

Thank you Annie 1960.

Not a first time buyer but have not purchased a house for 25 years. In addition my house is not going up for sale until I move into my new home.

The house is in England.

I have received the PFI by email from my independent solicitor. I have looked at what the seller has written and there is no mention of subsidence, even though he knew it exisisted as I also have a copy of the report he had received in 2007.
That said, I cannot see an area on the form for making mention of this.
Should he have still mentioned it somewhere?

Thanks again, it is appreciated.

ruggedtoast

Is there a time period in which claims for subsidence are no longer deemed relevant by insurance companies? Do they accept, for example, there’s been nothing to note in the last 20 years so we can accept ‘currently’ there are no problems. Hence my comment about employing a structural engineer.

Most high street insurers wont go near such a property. Some, like Aviva I believe at the moment, allow you a number of years without movement, but a few years ago they wouldnt quote.

If movement is noticed buy a new buyer it is usually referred to the last insurer as they assume that is has been ongoing but unnoticed for some time.

I am not totally put off by the cost, perhaps I am a fool for this, but would not like to buy future problems. That said I wonder if I now have room for price negotiation?

Based on what you have said, unless the mine was a gold mine and one of the shafts has opened up in the basement revealing a glittering world of metallic wealth, I would be offering them £0.00p for this property so anything more than that and you are being more generous than me!

kaisertwo

ruggedtoast wrote: »

Most high street insurers wont go near such a property. Some, like Aviva I believe at the moment, allow you a number of years without movement, but a few years ago they wouldnt quote.

If movement is noticed buy a new buyer it is usually referred to the last insurer as they assume that is has been ongoing but unnoticed for some time.



Based on what you have said, unless the mine was a gold mine and one of the shafts has opened up in the basement revealing a glittering world of metallic wealth, I would be offering them £0.00p for this property so anything more than that and you are being more generous than me!

Thank you very much indeed for a detailed response and for your frank honesty, which also made me smile.

HelenRachel

We've just pulled out of buying a house with minor historical subsidence (15years ago). You will find it hard to sell the property in future and difficult to insure. The Insurence companies will do he same searches you have if you put a claims in for subsidence so if you do buy this property I would assume that you won't be covered for any subsidence issue

kaisertwo

HelenRachel wrote: »

We've just pulled out of buying a house with minor historical subsidence (15years ago). You will find it hard to sell the property in future and difficult to insure. The Insurence companies will do he same searches you have if you put a claims in for subsidence so if you do buy this property I would assume that you won't be covered for any subsidence issue

Thank you HelenRachel.

I know it makes good sense what you say and as difficult as it is my head is finally overcoming my heart.

Good luck with your searches.

ruggedtoast

Personally I think I could overlook historical subsidence as long as I knew what it was. Generally its drains or tree roots.

Mines however are another matter.

dominoman

I wouldn't let historic minor subsidence put me off a house. Many houses have had subsidence and yes it can be a pain and could put some people off, but if you avoid every house that has had subsidence you reduce your options pretty massively.

Having said that, definitely get a structural survey so you have a good idea what you are buying. You will need to pay for it though. The seller won't.