Subsidence Claim on Detached Garage

[dbarton.uk]

Hi,

I'm looking for some advice on how to proceed with the purchase of new home, hope you can help...

We're just at the point of exchange of contracts, and our solicitor has sent us details of a recent subsidence claim made against the detached garage. The claim was settled recently, and the garage has been patched up ready for sale. The cause of the subsidence is documented as a combination of poor subsoil and bad garage raft foundations (category3). According to survey there is no evidence at all of any subsidence in the bungalow (built in the 80's) - a couple of hairline cracks in a couple of walls but nothing else. In my mind, after further enquiries there is little risk to the bungalow of subsidence. Anyway I have a couple of questions:

1. Most insurance cos state with their building insurance that there must be no subsidence in the property or surrounding area. If I was to knock down the garage, can I then claim that there is no subsidence in the property or surrounding area (actually I'm not sure how we are supposed to know whether or not there has been subsidence within 100 yards of the house (nothing showed up in our homebuyers report), and in fact our current house is within 100 yards of the new house, so presumably if we can't say there is no subsidence in the new house area, then we would have to declare subsidence in the area for the building insurance in our current house!! (and tell all the neighbours to do the same presumably!) If we were to go down the route of not declaring the subsidence on the garage, what would be the worst case scenario, and what is the likely scenario?

1. Would there be any circumstance in which we couldn't transfer the seller's building insurance into our name? Is this a legal obligation on behalf of the insurance company? Ideally we would not want to stick with the current insurer.

2. Are we able to exchange contracts without having the building insurance in place. Is it possible to get into a position where we have exchanged contracts but then end up losing our 10% deposit because we cannot complete due to the mortgage co withdrawing the mortgage offer?

Any advice appreciated,

Thanks

[Lobster]

I tried to buy a property once which turned out to have had subsidence in the past - we obtained details of the current insurers and tried to get them to cover us but the declined, full stop. So there's your answer. We didn't buy the place.

Absolutely don't exchange contracts until you have buildings insurance in place - you could be in deep do-do if the place is not insurable. Although in fact unless the lenders are totally up the creek there's no way you'll get a mortgage *until* you have buildings insurance.

David

[Cicero]

=================================== I think you're worrying unnecessarily. Unless the local searches (done by your solicitor) show some general condition such as mining subsidence etc. then the most likely cause of the damage to the garage is poor workmanship during building unrelated to the construction of the house itself.

I doubt if you will lose your deposit if you withdraw because the reason for doing so appears to be a fault in the property not initially disclosed to you.

Ask your insurance company for their quotation based on the full facts and if they refuse to insure just demand your deposit and walk away.

Cic.

[Ian]

Speak to the solicitor you are paying, they will give you advice. You will find it very difficult to get insurance, you should sue whoever you have had dealing with your side of things. To only tell you now shows incompetence. You can not have a policy taken out by a previous person transferred in to your name. The insurer will already have details if they have been declared and the work for subsidence must have been guaranteed and plans submitted to the insurer. You state that the garage was "patched up" although a full claim for the repair was settled. This shows the seller has walked away with the money and tried to hide it. If the garage has not been repaired then contact the insurer as they would be interested.

I would avoid the sale, sue whoever didn't give you the correct advice and look for somewhere else.

[meow2222]

of course it doesnt,.

NT

[Martin Bonner]

Yes. But if your solicitor is on the ball, he won't let you.

Yes. Exchanging contractw without ensuring you can get buildings insurance is a really good way to do it!

Note also: you risk losing not only your 10% deposit, but also any further expenses the vendor is put to (like a bridging loan until he can find a new buyer).

HOWEVER having said all that, we bought a house where the corner had subsided and it was underpinned by the insurance and we took over the insurance no trouble. (Mind you in that case, the problem was that the gutter fitted after the thatch was converted to tile discharged at the foot of the wall; the wall was clay lump (think: mud brick), and the wall stood straight on the soil - ZERO foundation. The result was that the earth + wall got washed away over the years. Underpin + proper surface water drain = no problem).

[Ian_m]

Been there, done that, got the T-shirt + cuddly toy. Unable to transfer insurance and no other insurance company would quote, so ended up not buying.

I think though the sellers can take out indemnity insurance which will allow transfer of their insurance, though one of my friends got burnt by this as the insurer slowly raised their premiums (started £200 per year got to £800) and they couldn't move. Finally paid £500 to get a structural surveyer in who confirmed the building was no longer moving (they had to replace their patio with grass as well) that finally allowed them to change insurers.

[manatbandq]

What for?

Why? It's quite normal to be told things before exchange when it's still not too late to pull out.

MBQ