Puchased BTL property. Insurance company highlighted an "subsidence" issue

NeedHelp2021

Grumpy_chap said:

NeedHelp2021 said:

I commissioned "Home Buyers Report" on the property by an independent RICS surveyor who gave the property a clean chit which followed Completion and contract exchange last week.

When I reached out to Insurance company for Buildings/ Landlord insurance, I was informed that the aforesaid property has been reported for subsidence (but not claimed owing) to which Insurance has been denied. The Insurance company advised to commission "Structural survey" and remediate the problem before seeking for obtaining Buildings/ Landlord insurance. 

1. In the Fitting and Contents TA6 form under the section "Insurance" there is a question "Has the seller made any building insurance claims?" The seller has responded "No" to it. Is it mis-representation/ falsification of facts?
2. Should I proceed with "Structural survey" and remediation path as suggested? What would be the costs & long term implications involved?

Are you an FTB?  Normally, you need to have Buildings Insurance in place from the moment of (before) exchange of contracts as you are committed to buy at that point, even if there were an "event" while the property remains in the care of the vendor.

Are you able to take out Buildings Insurance that excludes subsidence in the interim until you get the issue around (possible) subsidence resolved?

It is possible that the vendor made a contact with the insurer and mentioned the word "subsidence" so it has been recorded, but then there was no subsidence and no claim, hence the insurer advising "reported for subsidence (but not claimed)" and the vendors stating on the TA6 "No" to the question about past claims.

Pragmatically, the next step is to commission the structural survey as required by the insurer.  It is important to understand the insurer's requirements / qualifications that the surveyor must hold so that they accept the findings of the report.  This may conclude there is no subsidence and the matter will be closed.  Alternatively, if the report advises there is subsidence, the next steps and resolution can be decided on at that time.

Good luck!

Are you an FTB?  

>> First time landlord.

Normally, you need to have Buildings Insurance in place from the moment of (before) exchange of contracts as you are committed to buy at that point, even if there were an "event" while the property remains in the care of the vendor.

>> I missed this crucial step. I have been naïve, and the solicitor chose not to highlight its repurcurssions.

Are you able to take out Buildings Insurance that excludes subsidence in the interim until you get the issue around (possible) subsidence resolved?

>> Good idea. I will try this route. At least I have Building insurance in place and work on Subsidence piece.

It is possible that the vendor made a contact with the insurer and mentioned the word "subsidence" so it has been recorded, but then there was no subsidence and no claim, hence the insurer advising "reported for subsidence (but not claimed)" 

>> Yes, agree that with the hypothesis.

and the vendors stating on the TA6 "No" to the question about past claims.

>> Well the question in TA6 is NOT if the insurance company has paid out any insurance claim. It asks if the seller made any building insurance claim at all. So in my view the seller has attempted to make a claim. So the seller should have responded YES to the question.

Pragmatically, the next step is to commission the structural survey as required by the insurer.  

>> Agree

It is important to understand the insurer's requirements / qualifications that the surveyor must hold so that they accept the findings of the report.  

>> Agree

This may conclude there is no subsidence and the matter will be closed.  Alternatively, if the report advises there is subsidence, the next steps and resolution can be decided on at that time.

>> Agree

Good luck!
>> Thank you!!!

Slithery

NeedHelp2021 said:

and the vendors stating on the TA6 "No" to the question about past claims.

>> Well the question in TA6 is NOT if the insurance company has paid out any insurance claim. It asks if the seller made any building insurance claim at all. So in my view the seller has attempted to make a claim. So the seller should have responded YES to the question.

Your view is incorrect. Informing the insurer that you think there may be subsidence is not the same thing as attempting to make a claim

canaldumidi

NeedHelp2021 said:

canaldumidi said:

NeedHelp2021 said:

......::

1. Can I ask my solicitor how the subsidence issue was not picked up in the searches?
2. Can I ask the surveyor how the issue of subsidence was on picked in the "Home buyers report"?
3. The agent (and the seller) never disclosed the underlying "subsidence" issue in the property. Do I have a legal stand to pursue case for misrepresentation of facts?
4. In the Fitting and Contents TA6 form under the section "Insurance" there is a question "Has the seller made any building insurance claims?" The seller has responded "No" to it. Is it mis-representation/ falsification of facts?
5. Should I proceed with "Structural survey" and remediation path as suggested? What would be the costs & long term implications involved?
6. How easy/ difficult is it to obtain Buldings/ Landlord insurance?
7. Any other options I can explore?

As you can imagine the awful situation we have got ourselves into, any help/ advice/ pointers will be truly appreciated (good karma on your way).

1. You can ask, but solicitor's searches relate to the legal title, not the condition of the property.

2. if there was no sign of subsidence, the surveyor would not have reason to mention it. Since no claim was even made (I think?), this suggests there may not not actually be a subsidence issue

3. If the agent was not made aware by his client (the seller) of a subsidence issue, he did not misrepresent the facts. If the seller did not state anywhere that there was no subsidence issue (check the Property Information Form), he did not misrepresent the facts.

4. You say "but not claimed owing". It's not clear what you mean by this, though I suspect you mean the seller mentioned/reported possible subsidence to his insurer, but did not actually make a claim. Is that the case? However, if the seller did make an actual  insurance claim, then you will have a claim against the seller.

5. It sounds like if you want insurance, or your mortgage lender insists you insure, then you have no choice. Though an independant insurance broker might recommend an insurer less likely to take this hard-line attitude. A Structural Survey by a Structural Engineer will probably costs around £1000. The implications depend on the subsequent report. If subsidence is not found, there will be no (or minimal) implications. If ongoing subsidence is found, you may have to underpin the property, which can be very expensive and require specialist (expensive)  insurance thereafter.

6. Speak to an independant insurance broker who specialises in a) BTLs and b) subsidence

7. Not that I can think of!

Now - where's my good karma!

Now - where's my good karma!

>> Loads and loads have been shipped. Just watch out for the Amazon delivery

.....

Thanks once again canaldumidi. May your tribe increase.

Ha! I have constant problems with Amazon deliveries. Live in a very wide rural postcode and GPS always takes the drivers to the village centre. I'm not there!

Very grateful for your encouragement that I be fruitful and multiply, but sadly 16 years of repeated chemo therapy make it a bit of a long shot.....!

NeedHelp2021

Slithery said:

NeedHelp2021 said:

and the vendors stating on the TA6 "No" to the question about past claims.

>> Well the question in TA6 is NOT if the insurance company has paid out any insurance claim. It asks if the seller made any building insurance claim at all. So in my view the seller has attempted to make a claim. So the seller should have responded YES to the question.

Your view is incorrect. Informing the insurer that you think there may be subsidence is not the same thing as attempting to make a claim

I am keen to understand if its a matter of interpretation.

TA6 form "Insurance" section question is: "Has the seller made any building insurance claims?".

In my view the question IF the question was "Has the seller made any SUCCESSFUL building insurance claims?", I would agree the seller rightfully stated "No". 

My hypotheses would be - the seller definitely put in a claim, but got the patchwork done from a local builder as it was cheaper option than paying the subsidence excess - which explains Insurance company now stating "No claims were paid out".

With that supposition, the answer to the question "Has the seller made any building insurance claims?" should have been "YES" by the seller in TA6.

I would be keen to know your views.

canaldumidi

NeedHelp2021 said:

Slithery said:

NeedHelp2021 said:

and the vendors stating on the TA6 "No" to the question about past claims.

>> Well the question in TA6 is NOT if the insurance company has paid out any insurance claim. It asks if the seller made any building insurance claim at all. So in my view the seller has attempted to make a claim. So the seller should have responded YES to the question.

Your view is incorrect. Informing the insurer that you think there may be subsidence is not the same thing as attempting to make a claim

I am keen to understand if its a matter of interpretation.

TA6 form "Insurance" section question is: "Has the seller made any building insurance claims?".

In my view the question IF the question was "Has the seller made any SUCCESSFUL building insurance claims?", I would agree the seller rightfully stated "No". 

My hypotheses would be - the seller definitely put in a claim, but got the patchwork done from a local builder as it was cheaper option than paying the subsidence excess - which explains Insurance company now stating "No claims were paid out".

With that supposition, the answer to the question "Has the seller made any building insurance claims?" should have been "YES" by the seller in TA6.

I would be keen to know your views.

The question is clear. It says "Has the seller made any building insurance claims?".

It does not say "made any SUCCESSFUL building insurance claims?" Nor does it say "Has the seller advised the insurer of a potential issue, or sought advice, that might lead to an insurance claim?"

Crashy_Time

NeedHelp2021 said:

user1977 said:

When you say you've "purchased" the property, do you mean actually completed the purchase? If so, it seems a bit late to be arranging buildings insurance. Or are you at some earlier stage in the process? 

Yes, actually completed the purchase, and caught unawares about arranging building insurance prior to complete. In my defense, the solicitor/ agent did not give me heads up. I had contacted one insurance company for Landlord insurance who told me they cannot quote for an insurance until a tenant has been finalised. At this point I thought of reaching out to Insurance companies only after contract exchange and completion. 

Do you have a tenant?

NeedHelp2021

canaldumidi said:

NeedHelp2021 said:

canaldumidi said:

NeedHelp2021 said:

......::

1. Can I ask my solicitor how the subsidence issue was not picked up in the searches?
2. Can I ask the surveyor how the issue of subsidence was on picked in the "Home buyers report"?
3. The agent (and the seller) never disclosed the underlying "subsidence" issue in the property. Do I have a legal stand to pursue case for misrepresentation of facts?
4. In the Fitting and Contents TA6 form under the section "Insurance" there is a question "Has the seller made any building insurance claims?" The seller has responded "No" to it. Is it mis-representation/ falsification of facts?
5. Should I proceed with "Structural survey" and remediation path as suggested? What would be the costs & long term implications involved?
6. How easy/ difficult is it to obtain Buldings/ Landlord insurance?
7. Any other options I can explore?

As you can imagine the awful situation we have got ourselves into, any help/ advice/ pointers will be truly appreciated (good karma on your way).

1. You can ask, but solicitor's searches relate to the legal title, not the condition of the property.

2. if there was no sign of subsidence, the surveyor would not have reason to mention it. Since no claim was even made (I think?), this suggests there may not not actually be a subsidence issue

3. If the agent was not made aware by his client (the seller) of a subsidence issue, he did not misrepresent the facts. If the seller did not state anywhere that there was no subsidence issue (check the Property Information Form), he did not misrepresent the facts.

4. You say "but not claimed owing". It's not clear what you mean by this, though I suspect you mean the seller mentioned/reported possible subsidence to his insurer, but did not actually make a claim. Is that the case? However, if the seller did make an actual  insurance claim, then you will have a claim against the seller.

5. It sounds like if you want insurance, or your mortgage lender insists you insure, then you have no choice. Though an independant insurance broker might recommend an insurer less likely to take this hard-line attitude. A Structural Survey by a Structural Engineer will probably costs around £1000. The implications depend on the subsequent report. If subsidence is not found, there will be no (or minimal) implications. If ongoing subsidence is found, you may have to underpin the property, which can be very expensive and require specialist (expensive)  insurance thereafter.

6. Speak to an independant insurance broker who specialises in a) BTLs and b) subsidence

7. Not that I can think of!

Now - where's my good karma!

Now - where's my good karma!

>> Loads and loads have been shipped. Just watch out for the Amazon delivery

.....

Thanks once again canaldumidi. May your tribe increase.

Ha! I have constant problems with Amazon deliveries. Live in a very wide rural postcode and GPS always takes the drivers to the village centre. I'm not there!

Very grateful for your encouragement that I be fruitful and multiply, but sadly 16 years of repeated chemo therapy make it a bit of a long shot.....!

Very grateful for your encouragement that I be fruitful and multiply, but sadly 16 years of repeated chemo therapy make it a bit of a long shot.....!
>> I cannot help but admire you after reading that. Reminds me of "tough times dont last, tough people do!". Stay blessed.  

user1977

NeedHelp2021 said:

Slithery said:

NeedHelp2021 said:

and the vendors stating on the TA6 "No" to the question about past claims.

>> Well the question in TA6 is NOT if the insurance company has paid out any insurance claim. It asks if the seller made any building insurance claim at all. So in my view the seller has attempted to make a claim. So the seller should have responded YES to the question.

Your view is incorrect. Informing the insurer that you think there may be subsidence is not the same thing as attempting to make a claim

I am keen to understand if its a matter of interpretation.

TA6 form "Insurance" section question is: "Has the seller made any building insurance claims?".

In my view the question IF the question was "Has the seller made any SUCCESSFUL building insurance claims?", I would agree the seller rightfully stated "No". 

My hypotheses would be - the seller definitely put in a claim, but got the patchwork done from a local builder as it was cheaper option than paying the subsidence excess - which explains Insurance company now stating "No claims were paid out".

With that supposition, the answer to the question "Has the seller made any building insurance claims?" should have been "YES" by the seller in TA6.

But you also said earlier " I meant "I was informed that the aforesaid property has been reported for subsidence by the seller (but not claimed)." It could just have been the insurance company noting a chat about cracks or something else which somebody suspected might be to do with subsidence. Which didn't necessarily result in a claim being submitted.

NeedHelp2021

user1977 said:

NeedHelp2021 said:

Slithery said:

NeedHelp2021 said:

and the vendors stating on the TA6 "No" to the question about past claims.

>> Well the question in TA6 is NOT if the insurance company has paid out any insurance claim. It asks if the seller made any building insurance claim at all. So in my view the seller has attempted to make a claim. So the seller should have responded YES to the question.

Your view is incorrect. Informing the insurer that you think there may be subsidence is not the same thing as attempting to make a claim

I am keen to understand if its a matter of interpretation.

TA6 form "Insurance" section question is: "Has the seller made any building insurance claims?".

In my view the question IF the question was "Has the seller made any SUCCESSFUL building insurance claims?", I would agree the seller rightfully stated "No". 

My hypotheses would be - the seller definitely put in a claim, but got the patchwork done from a local builder as it was cheaper option than paying the subsidence excess - which explains Insurance company now stating "No claims were paid out".

With that supposition, the answer to the question "Has the seller made any building insurance claims?" should have been "YES" by the seller in TA6.

But you also said earlier " I meant "I was informed that the aforesaid property has been reported for subsidence by the seller (but not claimed)." It could just have been the insurance company noting a chat about cracks or something else which somebody suspected might be to do with subsidence. Which didn't necessarily result in a claim being submitted.

It could just have been the insurance company noting a chat about cracks or something else which somebody suspected might be to do with subsidence. Which didn't necessarily result in a claim being submitted.

>> Yes I agree maybe there were some cracks and the insurance company decided to put a blanket term "subsidence" thereby putting me in unfavorable position 

eddddy

NeedHelp2021 said:

With that supposition, the answer to the question "Has the seller made any building insurance claims?" should have been "YES" by the seller in TA6.

No - at this stage, you've no evidence that any claim was made. It may have been nothing more than a casual query about a crack.


This newspaper article talks about a policyholder who phoned their contents insurer twice with casual queries (but not related to subsidence) - they never made a claim - but the calls were logged on the CUE database, and their premiums shot-up.

Link: https://www.theguardian.com/money/2013/sep/30/insurance-query-higher-premiums


The insurance companies argue that they keep this records to prevent potential fraud and more accurately assess risk, but I'm not convinced that the way they use the info is fair and reasonable...