What to do about structural movement?

CarlosS_09

Hi all,

I’d appreciate some advice on what has become a really scary issue with my leasehold flat (first floor flat in a Victorian converted terrace).

When I bought the flat, the survey mentioned ‘differential movement’ that had caused cracks in the bay window of the ground floor flat and possibly a tilt in the parapet wall. It didn’t say anything about whether the movement was historic or non-progressive. We didn’t think this was anything serious at the time, as the surveyor said we could fill the cracks, re-render and wait to see if cracks re-emerge. Since then, I have also noted that the ground floor flat has a large and scary looking external crack above the doorway of its back garden extension (must be new, otherwise I have no idea how our surveyor didn’t spot this one).

We recently complained to the freeholder that the building insurance is much too expensive (£4,800PA across three flats). As a result he is currently trying to reinsure, and is confident that he will get a much lower rate. At first I thought this was good news as we want to sell the flat within the next few years, and the service charge is currently so high as to be off putting.

Problem is, I’m certain that he won’t mention the movement issues flagged in our survey to the new insurer when seeking new quotes. This leaves us in a very difficult position. If he takes out the new insurance and we end up having to make a claim to fix the structural issues, surely the insurer will ask to see our survey, meaning that when the insurer sees that the movement issues were there already the claim will be rejected and we will have to pay for the works ourselves? And even worse, we might not be able to get new insurance afterwards?

I’ve started to think my only option here is to get the freeholder to tell the current insurance provider about the movement issues now and get them to pay for any necessary works done. The insurer should accept this as the policy was in place when we had our survey done. We would, however, potentially have to accept being stuck with very high premiums/ a flat that will always be very difficult to insure/sell. This would be very painful as we have our hearts set on starting a family, and our current place is too small.

Do I have any alternative options here?

eddddy

You should tell your freeholder all the relevant facts - e.g. the cracks, your survey report, etc.

In an ideal world, things would then work like this...

• It would be up to your freeholder to ensure that the building is adequately insured. So that would include telling prospective insurers about the cracking etc, if required.

• If your freeholder fails to tell an insurer, and the result of that failure is that a subsidence claim gets refused... then your freeholder has almost certainly been negligent.

• If, say, the subsidence claim would have been for £50k - but it is refused because of your freeholder's negligence - you could then sue your freeholder for £50k for the repairs.

But...

What type of organisation/person owns your freehold? Do they have assets?

A lot of freeholds are owned by "shell companies" with no assets. So if you successfully sue them, they just go bankrupt without paying.

Either way, it might be best to hassle the freeholder a bit, and try to make sure they are doing things correctly.

CarlosS_09

Thanks Eddy. I have told the freeholder about the bay window issue in person but he didn’t seem to want to know. Shall I send him the survey by email so that I have evidence that he knows?

The freeholder is an individual who seems fairly wealthy - for the most part a managing agent manages the property, but they are very unresponsive so I often end up dealing with him directly.

eddddy

I think I'd just email the survey with a note saying something like "Just for your information - here's the survey mentioning the possible movement in the bay window. It doesn't mention the crack over the back door. I'm not sure if it was visible when the survey was done."

Then you have some evidence that you've 'done your duty' and informed the freeholder.


One thought... I've been assuming there are 2 parties on your lease (freeholder and leaseholder) - and the managing agent is your freeholder's agent.

But are there 3 parties (Freeholder, Leaseholder and management company)? If so, you need to inform whichever party is responsible for insurance.


 

propertyrental

CarlosS_09 said:

Thanks Eddy. I have told the freeholder about the bay window issue in person but he didn’t seem to want to know. ....

With something like this you need to act formally ie in writing. Personally I'd send a letter, but email is OK so long as that's an accepted method of communication between you.

CarlosS_09

Thanks Eddy, that sounds wise. The lease states that the freeholder is responsible for arranging insurance - the managing agent isn’t mentioned in there at all. The insurance is under the freeholder’s name. Normally the managing agent arranges the insurance, but the freeholder is doing it this time as he thinks the managing agent is auto renewing and not doing enough to seek  the best deal.

Maybe I should cc both of them on the email?