Should I walk away? cursed property with contaminated land and valuation errors

[Deleted User]

I am in the process of buying a property. I have listed the stages on various threads (mostly existing) on this site. 

To clarify, it is a flat built in the 1980s on a former works. I am a FTB so forgive me if this is normal and I am over-reacting.

Right, I made the offer on the property in late January which was accepted below asking price.  So far so good right? It had been on the market for some time but they never advised of any reason why. I applied for a mortgage early February, this was approved a few days ago. I also had a home buyer report done which came back clear.

Sadly this is when the problems began. 

First of all, the valuation on the property was filled with errors, the address and price was correct, but nothing more. It described a completely different building or much more value than the one I am going for. My solicitor is trying to look into this with the bank.

Secondly and much more show stopping, is that the property is probably build on contaminated land. Apparently they did not check the land prior to 2000 when building and it is known stuff was dumped in the land the property was built on. I had received an environmental report earlier before the mortgage was approved which stated the land could be potentially contaminated. BUT that they could pass the property if proof of insurance was provided. I thought that wouldn't be a big deal.

However fast forward to now, and the bank are basically saying if the land is confirmed as contaminated, they will pull the the offer of a mortgage. I guess they only learned about it once the offer was approved and spoke to my solicitor. We are awaiting a search but the solicitor sounds confident that it will come back with a contamination note. They are suggesting I try to get insurance to cover this. I am unsure if the insurance the freeholder has would cover it already. 

But I am thinking if the land is marked as contaminated, this will mean the end as I have no wish to own property on contaminated land. How would you even sell it?! I am thinking about walking if confirmed contamination comes back. Am I being over the top? I feel bad about pulling out, but I can't put everything I have into a radioactive heap.

To top it off the door number of the property is 13, so speak about a curse!

ProDave

A block of 3 storey flats up here probably about 30 flats in total, was completely demolished and new flats built (after decontaminating the land) due to contamination by a former gas works on the site.

I would personally walk away.

user1977

[Deleted User] said:

built in the 1980s on a former works

it is known stuff was dumped in the land the property was built on

What sort of works? What sort of "stuff"?

KievLover

As they valued a seemingly different property, I'd want to be sure they've inspected the right bleedin' land.

Then I would RUN. Even if laws say it's fine to own it now, you don't know what changes might be made to protect buyers in future. 

[Deleted User]

user1977 said:

Deleted_User said:

built in the 1980s on a former works

it is known stuff was dumped in the land the property was built on

What sort of works? What sort of "stuff"?

Docks and factory. Chemicals, asbestos, tobacco. And general land rubbish. These came through the area. Impossible to say what is in the ground without digging it up. There were many dump sites in the area. 

[Deleted User]

KievLover said:

As they valued a seemingly different property, I'd want to be sure they've inspected the right bleedin' land.

Then I would RUN. Even if laws say it's fine to own it now, you don't know what changes might be made to protect buyers in future. 

The land in the environmental report is the correct location. The errors were within the banks valuation.

[Deleted User]

The problem is if the land is contaminated and it needs to be fixed then they may need to demolish the flats. Even if insurance covers it, imagine the disruption to you.

If nothing is done then you will have the same issue when you come to sell. Whoever is buying it will find out, their bank will be worried.

Then again, it's a difficult time for FTBs and you could potentially get a bargain if you can use them to push the price down a bit. Just offer them less and point out that you have sorted out all the issues and if they reject your offer they will have to go through the same again with someone else.

Diver2

They did check for land contamination prior to 2000, but the formal local council register of Contaminated Land did not make an appearance until later.

Check the original planning permission to see if it had a contamination investigation condition and whether this was subsequently discharged (which means a contamination investigation was undertaken at the time and a report should exist).

Also, if these are flats then the ground is likely sealed by hard surfaces and it's unlikely to affect the property. 

Loads of properties are built on built on former "works" and in most cases it's OK. 

[Deleted User]

[Deleted User] said:

The problem is if the land is contaminated and it needs to be fixed then they may need to demolish the flats. Even if insurance covers it, imagine the disruption to you.

If nothing is done then you will have the same issue when you come to sell. Whoever is buying it will find out, their bank will be worried.

Then again, it's a difficult time for FTBs and you could potentially get a bargain if you can use them to push the price down a bit. Just offer them less and point out that you have sorted out all the issues and if they reject your offer they will have to go through the same again with someone else.

That is my main concern. And a good point you made about the disruption, not to mention new build would not be as high quality construction wise.

If I were to still buy it (providing the bank would still give the money) I would ask for a big chunk off. I doubt the seller would agree but they can only say no right?! I am talking 50k off. 

[Deleted User]

Diver2 said:

They did check for land contamination prior to 2000, but the formal local council register of Contaminated Land did not make an appearance until later.

Check the original planning permission to see if it had a contamination investigation condition and whether this was subsequently discharged (which means a contamination investigation was undertaken at the time and a report should exist).

Also, if these are flats then the ground is likely sealed by hard surfaces and it's unlikely to affect the property. 

Loads of properties are built on built on former "works" and in most cases it's OK. 

Oh I didn't know that thank you.

I will need to wait for the search to come back because I am not sure what the search contains, if it would have any of the original documents relating to planning permission or any parts of it.

The last two points may be true, and I would not be concerned if it was just rubbish in the ground, the issue is the bank will not lend if there is any contamination note and I would likely have a hard time selling it later on. If I can get a big discount then maybe it would work.

Diver2

You can check most local council on-line planning portals yourself for a property planning history, you don't necessarily need to wait for your legal report. You'll likely get much more detail there as well.