House with previous subsidence claim not disclosed - pre-exhange

Tiglet2

niceguyed said:

In subsequent legal enquiries, the vendor responded no past subsidence or underpinning and on the TA6 gave no indication of special insurance terms/conditions.  

Fast forward to last week.  Our surveyor reports several areas of structural movement, in his opinion subsidence  - and he believed there had been a past repair.  An added layer of complication is the house is in trust to the daughters of vendor who are elderly (one passed away and one in hospital).  Advice was the house needed a full structural survey and investigations of a paper trail for previous repairs.  

On speaking to the agent the initial feedback was the vendor knew nothing about subsidence.  We put forward our position to prove our surveyor wrong and pay for a full SE survey or we would withdraw.  The last we heard yesterday was the agent was helping them pull together a quote for a structural engineer survey.  We'd already advised the agent had we known of potential subsidence we would certainly not have made an offer.  

Well today I get an email off the agent.  The vendor has magically found a cert of structural adequacy for subsidence damage from 2011 which preceded their 2013 purchase but was provided to them, the work was completed through the insurer at the time.  We have that copy of the full works.

I'm reading the above as if the solicitor did ask the question, even if OP hadn't.  However, as the daughter of the vendor is acting as POA in the sale, it is possible that she did not know of any past subsidence issues and so answered the legal enquiry "to the best of her knowledge", when filling out the TA6 and answering any legal enquiries raised by the OP's solicitor.  She was subsequently made aware of the discrepancy following OP's survey and the initial feedback provided to the agent.  I imagine the daughter has searched through all the paperwork at her parents property to find anything relating to this and she has located the Certificate of Structural Adequacy, which now proves that subsidence works were done in 2011, prior to the vendor's purchase.

A Certificate of Structural Adequacy should be sufficient for your lender to be able to proceed as the property should be stable and no further problems should occur.

However, if as your surveyor, seems to think that the subsidence is ongoing, then the works done in 2011 were not sufficient and further works would be needed.  At this point, OP needs to decide whether to instruct a further survey by a structural engineer and see what that report recommends, or cut their losses by walking away.

tooldle

pinkteapot said:

It's an awful, stressful situation to be in, but in a few weeks' time you'll be thanking your lucky stars this came out before exchange, rather than after. While you'd have had recourse if the TA6 was incorrect, it would have been a VERY messy situation. 

While the comment above is correct that historical movement may no longer be an issue at all, previously underpinned houses do have a stigma which is likely to affect the value, so if you go ahead then do re-consider your offer amount. It can also be tricky to get insurance (you may need to stay with the insurer the vendor was using, so it could cost you a bit more if you can't shop around).

Just to address the point on stigma, value and insurance. I have previously purchased an underpinned house. Insurance wise, we stayed with the insurance company who had paid out on the claim, until such time as the claim no longer effects quotations (at that time it was 5 years, if i recall correctly), so for us it was around 3 years of using that company. Then we re-insured on the open market. At no point even prior to exchange were we refused insurance. We sold the property 8yrs later and broke the ceiling price for the street.
People often panic at the mere mention of underpinning. What many fail to realise is, an underpinned house is far more stable. Always always ask what caused the issue. In our case it was a collapsed culvert in the street, and this had caused the front of the property to drop slightly. Once underpinned, the house was sitting on a raft of concrete, considerably deeper than its original 1930's foundation. It was going nowhere, nor has it moved subsequently. 
The word subsidence seems to induce the same fear as Japanese Knot weed. Neither are an issue if dealt with correctly.
All houses move to a degree, settlement happens, the ground on which they are built expands and contracts with the seasons, tree roots grow, drains collapse etc. This is life.

blinko

I'd probably walk away from this one, sound like a lot of pain for not a lot of reward

niceguyed

Hi everyone, thanks so much for your replies and for the supportive comments.  Just to clarify we did not ask the vendor directly (via gent) if the property had undergone subsidence pre-offer.  In any case they would have answered no if their current story is to be believed.    However, this was asked very clearly when enquiries started which was pre-survey.  On reflection and speaking to the agent again this morning, I believe this is likely a case of not being aware because of the POA situation.

Just to confirm the property has not been underpinned.  Reading the structural report in more detail from 2011, the insurer believes there was another repair pre 2011, likely 1980s.  Repair was localised to the garage but our surveyor has spotted structural movement in several places including the previous repair.  

I do agree, the survey did its job and much worse to buy not knowing.  The agents are good, we like them (dare I say trust) and believe these issues entirely originate from the vendors lack of organisation.  I'm still irritated the vendor advised our agent the survey from 2013 showed no major issues and that they wouldn't move on price.  I get that its an older house but an unanswered question  will always be how much they really knew?  When we raised the issue the vendor was more worried about the house going back on the market rather than working with us to appoint a SE.  I don't think they've quite grasped the reality that subsidence will put many people off, especially when it is progressive.  Our agent confirmed they will let any potential buyer know the past and current issues.  

So that wraps up the story.  We confirmed with our agent we will break chain, a family member has kindly stepped in.  I'm hoping we will be in a stronger position to buy and we also get to save up whilst we are looking.  

Thanks all.  

tooldle

Out of interest OP, if there is no underpinning, what was the previous repair? Wall stitches?

niceguyed

SuzeQStan said:

Maybe we can think the best of the seller and say they didn’t know about the subsidence. But isn’t there a good chance they hoped no survey would be conducted and the structural issues would not come to light? To be fair it sounds like OP has had a lucky escape - just a shame it was so costly

That did cross our minds!  I read somewhere 1 in 10 buyers do not have a survey.  I am glad we did our homework on surveyors and picked a good one! It's a salutary and sobering lesson though having absolutely no legal recourse pre-contract.  We are scratching our heads beating ourselves up and thinking where did we go wrong? 

niceguyed

tooldle said:

Out of interest OP, if there is no underpinning, what was the previous repair? Wall stitches?

Yes, wall stiches sunk into the mortar, new base floor, remortaring, drainage work to divert water away from the foundations as far as I can tell.  

blinko

has the lender agreed to lend ?

this situation for sure will affect the sales price as well for you in the future? as naturally will be hard for you not to disclose or for future surveyors to not pick this up and you'll go through the same?

You'll also likely face higher insurance cost

blinko

It's a good point if foundation have been treated could be even stronger 💪