Possible "localised" subsidence on survey - How to Proceed?

tripled

We've had a homebuyers survey result back and amid the 44 pages of mostly mundane/routine issues, there is a reference to possible "localised" subsidence, probably caused by a collapsed drain (based on damp in that area), and so advises that a CCTV inspection and structural engineer's report should be obtained.

Having sought clarification, the gist is that, assuming it is the drain, once fixed it's unlikely to be a major issue, any washed away soil probably just need backfilling and then the hairline cracks filling in. As a localised issue it should not affect insurance, future resale value, etc. However, this needs confirmation from a structural engineer, and they might need to monitor the cracks for a year or two.

Can anyone advise on the usual protocol in this situation? Presumably we would pay for the drain survey and if the collapsed drain is confirmed would need to negotiate resolving that with the vendor. However, regarding the possible subsidence, should this go back to the vendor's buildings insurance to investigate (and us get a second opinion to confirm it was sorted)? If it did need monitoring, if we decided to proceed, would it be normal to expect some sort of indemnity from the vendor and/or their insurance in case it turned out to be a more significant issue requiring underpinning or other works? Would a mortgage lender likely be spooked if this was the case or if they notice it on their valuation?

Falafels

If you decide to continue with the purchase, you will need to negotiate with your vendors. They may refuse to do this work, but nobody on here can tell you what their response will be. If you decide to continue with the purchase, the risk lies with you once you own the property. You won't be the first on here to hope that their vendor will insure them against future structural problems, but it just doesn't work like that.

Have you had your valuation survey/mortage offer yet? 

tripled

Falafels said:
...

You won't be the first on here to hope that their vendor will insure them against future structural problems, but it just doesn't work like that.

Have you had your valuation survey/mortage offer yet? 

It's not a future structural problem, but a current one that's been identified by the survey. It's the extent of the remedial work needed that may take time to ascertain.

The mortgage company doesn't send out surveyors, however there is a valuer booked to visit soon. I'm assuming it's unlikely a valuer would notice, however presumably if there is an issue it will need to be disclosed to the lender at some stage.

Falafels

It sounds as though you're already confident as to how the whole process works....

tripled

Falafels said:

It sounds as though you're already confident as to how the whole process works....

Not particularly, I appreciate your input, however you answered a question I didn't ask. I know that if an issue is found or the house falls down the day after the property is sold, it's tough luck on the buyer. However I'm asking about an issue identified before sale and, if it would take some time to resolve, if the purchase can proceed with some sort of indemnity (assuming the vendor agreed) and if it is common practice to do so (and therefore generally acceptable to mortgage lenders).

tripled

The mortgage company didn't notice anything on the valuation, approved the mortgage and remain oblivious. We arranged a drain survey which did identify a drainage issue, but inspections by two different structural engineers (at our expense) and the vendors' insurance company over the course of the next three months eventually ruled out subsidence and explained the cracks without further monitoring being needed. Once this was concluded, the vendors arranged for the drains to be repaired and the cracks to be filled.