Structural movement and cracked drain - tough to get insurance?

jatrick2605

Hi all,

We are first-time buyers, mid-purchase on a 1930's semi in Birmingham. We had a full building survey conducted which found multiple small instances of structural movement. These all take the form if hairline cracks above or in the vicinity of door and window frames. The surveyor suggests that this is likely due to lack of lintels (original windows would have had timber lintels, and when replaced in the mid-80s with PVC double glazing, new lintels were not introduced.)

On the side elevation though – where the cracking still follows the door/window pattern – he suggested a drain survey focusing on the soil pipe to open drain to rule out drain leakage/escape of water as a contributing factor to the cracking nearby.

Of course then the drainage survey did find damage - a cracked rest bend in the gully beneath the Soil Vent Pipe. We're negotiating with the vendor on the repair which we want them to take on (£300-ish), but I'm at a bit of loss as to how we proceed with getting the property insured.

From what I've read here and elsewhere, some insurers like Direct Line differentiate between structural movement and subsidence, but add in the discovery of the drainage leak and I fear that would change the issue to "escape of water possibly meaning progressive subsidence", which would be far more difficult to insure, no?

I've spoken to a structural engineer about it, who basically says there's no way to quickly prove that the drain repair has stopped the movement, meaning to ongoing problem, meaning no declaration. He says they would need to monitor the movement over 5-6 months before they could certify that movement hasn't continued.

In that case, the best (/only) course of action would be as follows:

1) Seller makes drain repair
2) We take on seller's existing insurance (I read that current insurers are duty-bound to offer buyers the same policy)
3) We engage engineer to monitor movement
4) If movement stopped, all good and we look for our own insurance
5) If more movement noted, underpinning or similar could be required

Because of the potential future need for expensive underpinning, we would ask the seller to drop the price a little to reflect the risk we're taking.

Does this sound right? Any other ideas? Our solicitor's best advice thus far is "don't talk to insurers yet." I know we could also just not mention it, but makes me a little nervous, especially given the survey/drain-survey/solicitor and seller paper trail that now exists.

huckster

Having dealt with many people in this situation, I would have to tell you the worst possible position at this stage. You could have to pull out of the purchase, because either your mortgage company won't proceed or you believe that to continue would cause you far too much hassle and put you at financial risk.

If it were me I would want to assess the financial risk of proceeding by obtaining as much information as possible. It might be worth asking the surveyor, whether they think it is worth obtaining a structural engineers report, to include a costing of works required to deal with any issued found. But obviously there is a cost to this and if you pull out of the purchase, then it is more expense you won't get back.

You could approach the vendors with information about the full cost of works required and the cost of the structural survey etc, with a view to discounting the purchase price by a relevant sum. But obviously this might be rejected by the vendor.

At this stage there is no suggestion of ongoing subsidence, just the drain problem and the issue with the lintels. Perhaps once the drains have been fixed and lintels installed if necessary, the house would be a decent condition.

If you do exchange contracts, it would be sensible to obtain cover with the same Insurance Underwriter as the vendors. Be careful, as it is the Underwriters and not the Insurance company. For example, if they tell you it is Barclays Insurance, as Barclays Insurance use many different Underwriters, it is the actual Underwriters you need to use.