Subsidence - Builder vs Insurer?

donal_f

Hi All

I hope this is the right forum for this?

We live in a house we purchased as a new build from a large, national building firm in 2003. To make a long story short, we had quite a bit of cracking in one corner of the house in the early days. They came and repaired the cracks in the initial two year period and said it was normal settlement and not subsidence.

Over the years the cracking has very slowly got worse. And it has eventually become clear its subsidence. So, last Summer I reported this to my insurer. They sent out a surveyor who did a very quick examination. And then they confirmed it was subsidence, but wouldn't cover it as they felt it was due to initial substandard workmanship by the builder we bought from. I called NHBC and they said even if it happened in the ten year guarantee period, its not covered now as it is being reported after ten years have elapsed.

I then raised a complaint with the Financial Ombudsman. They partially ruled in my favour. They ruled that the insurance company hadn't done enough investigation work to prove their claim of poor workmanship. However, they also ruled that the insurance company was within their rights not to cover the claim if they did prove bad workmanship as its listed in their terms and conditions.

So, last week the insurance company sent out groundwork engineers who dug deep holes and took samples. I'm awaiting the written report - but they explained to me in person that the foundations weren't adequate for the ground and conditions our house is built on! So, I'm now left in the position where my insurance company won't cover the remediation work (likely to be expensive). And its too late with the NHBC/Builder.

So, I'd appreciate any advice you guys may have? In particular, do I have any legal recourse with the builder? It seems clear now that the house they sold me was not fit for purpose due to inadequate foundations? Can I use this to threaten legal action unless they cover the cost of remediation? Any other thoughts?

Clearly my biggest mistake here was not getting it looked at before the 10 year NHBC guarantee expired. It's also very frustrating as I've always had Buildings & Contents insurance - in the expectation that it would cover big costs like this. So, finding that my circumstances are not covered due to the fine print is not great. Makes me wonder what the point of having buildings insurance is?

Thanks in advance.

Regards,
Donal

huckster

Did you register this problem with NHBC before the 10 years ran out ?

If so, you still might have a claim under NHBC, as you did inform them of the issue within the 10 years.

The other issue i have, is that subsidence is often where the foundations have proved to be inadequate. The Insurers are using the fact that the house was built in 2003 to decline a claim on the basis of the standard exclusion related to poor workmanship. Had the house been built in 1993, i suspect that the Insurers would be dealing with a subsidence claim. So it could be argued that the Insurers are being unfair applying the exclusion.

You really need to see the report into the foundations to see just how bad the building work was. I am sure i have seen cases where a homeowner has obtained their own structural engineers report and they have found that the subsidence was caused by ground conditions and not inadequate foundations.

So two possible avenues, but it will be a struggle to get anyone to take responsibility. See what the Insurers engineers report says, by asking for a copy of the report. If necessary get another opinion.

donal_f

huckster wrote: »

Did you register this problem with NHBC before the 10 years ran out ?

Thanks for your reply. I'm afraid I didn't! Which is obviously quite frustrating now!

I guess I'll know for definite when I get the written report, but the engineer seemed very genuine without an axe to grind (unlike the surveyor - who seemed motivated to dismiss the claim on any grounds). And he felt the foundations weren't suitable for the ground conditions.

I'll update further when I have the written report.

Thanks for the reply, Huckster.

Donal

huckster

Research statute of limitations in regard to property. For things like credit cards it is 6 years, but for mortgages or property, i believe it is 12 years. Whether there is chance of a claim against the builder if they still exist, is a question i can't answer. Depends on when the statute of limitations runs from and case law that exists.

The other point i would make is that if you were going to have to foot the bill for underpinning works, you would get your own structural engineers report, detailing what the problem is and roughly how much it would cost to put it right.

rs65

Also the Latent Damage Act

http://www.nabarro.com/Downloads/what_are_the_limitation_act_periods_and_the_latent_damage_act.pdf

That link might not work so google

what_are_the_limitation_act_periods_and_the_latent%20%20_damage_act.pdf

donal_f

Thanks guys. Have read it and it seems like the 12 year statute of limitations applies!

So barring some unexpected change in the approach of my insurer, looks like I'll be footing the remediation myself. As well as the value of my house being affected! :mad: :mad:

donal_f

Just reading the doc rs65 mentioned again - it reads a bit different to the other document I read, in particular:

Negligence (other than personal injury or death)
l Within six years of the negligent act or omission
l (If later) within three years of the date of knowledge in cases of latent damage
l Negligent latent damage is barred by way of long stop after 15 years from
the negligent act or omission
l Period runs from the date the damage is suffered
l For physical damage, the limitation period runs from the date of the damage,
not the act which causes damage

This seems to suggest that once I take action on the subsidence within three years of becoming aware of it, and before 15 years has passed I can still launch legal action?

But elsewhere the documents refer to a 12 year statutue of limitations? #Confused!

antrobus

donal_f wrote: »

Just reading the doc rs65 mentioned again - it reads a bit different to the other document I read, in particular:...!

The Latent Damage Act 1986 simply amended the Limitation Act 1980 by inserting sections 14a (Special time limit for negligence actions where facts relevant to cause of action are not known at date of accrual) and 14b (Overriding time limit for negligence actions not involving personal injuries).

This is what I would think would apply in your case, i.e. three years from the date of knowledge of the damage, subject to the overriding fifteen year limit.

huckster

antrobus wrote: »

The Latent Damage Act 1986 simply amended the Limitation Act 1980 by inserting sections 14a (Special time limit for negligence actions where facts relevant to cause of action are not known at date of accrual) and 14b (Overriding time limit for negligence actions not involving personal injuries).

This is what I would think would apply in your case, i.e. three years from the date of knowledge of the damage, subject to the overriding fifteen year limit.

I think this is probably correct. OP should get some legal advice. If they have legal cover under their Home Insurance, they should check whether this would meet the cost of any legal action.

OP should check that the Building company still exists and can be sued if necessary.

antrobus

huckster wrote: »

I think this is probably correct. OP should get some legal advice. If they have legal cover under their Home Insurance, they should check whether this would meet the cost of any legal action....

OP should definitely get some legal advice. Subsidence normally equals a lot of money.

huckster wrote: »

...OP should check that the Building company still exists and can be sued if necessary.

Hopefully the "large, national building firm" concerned is still about.

donal_f

antrobus wrote: »

Hopefully the "large, national building firm" concerned is still about.

huckster wrote: »

OP should check that the Building company still exists and can be sued if necessary.

Probably fairer not to name it here, but thankfully it is still around!