A guy claims on his household insurance for subsidence and instead of the insurers doing the work they give him £34,000. He does not spend the money on the works, but sells up and goes away. The buyer discovers that there is a problem, but the vendor cannot be traced.
I think this is a case of 'caveat emptor' and the buyer should have had a survey done. But someone is trying to persuade me (in my professional capacity) that the vendor should have done the works or voluntarily revealed the situation and is therefore liable.
Thoughts?
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...or voluntarily revealed the situation...
Isn't a vendor now obliged to reveal any disputes with the neighbours?
Don't know if that legislation covers anything else.
Last edited by: Iffy on Thu 20 Jan 11 at 13:16
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Lots of "should haves" in this tale.
Vendor should have got the work done
Vendor should have revealed details
but
Buyer should have got a survey.
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Dead right Zero !
He should have disclosed it but decided not to mention it !
My neighbour does insurance work - he lost 40 000 quid on a job where the cheque was made out to the punter. Never annoy a builder though.
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The vendor clearly did know about the problem. He should have told the seller about it on his SPIF, he has an obligation to do so . The vendor does seem to be liable.
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Is there some sort of insurance in play should the vendor be liable (his solicitor's professional indemnity for example)?
Otherwise I'm struggling to see why it matters unles the vendor is (a) traced and (b) proved to have assets.
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Vendor is a theif and untraced.
Buyer is a muppet not doing a survey.
That is all a crook needs: one muppet with money...
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Out of interest was the property sold at a market rate or was it discounted for a quick sale ?
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We don't know for certain that the work needed to be done. There was an article somewhere recently, might have been the DT, saying that surveyors were too quick to diagnose subsidence in order to cover themselves, when a lot of cracks are just normal seasonal ground heave and don't necessarily matter.
Many supposedly independent surveyors actually work for the companies that would do the repair work.
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Its true, the work didnt need to be done,
If for example the work agreed was 30k, and the vendor was paid 30k, he could/should have revealed to buyer and the price differential agreed.
By keeping the 30k, and not revealing the issue, do we have a case of fraud here?
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>> Its true, the work didnt need to be done,
>>
>> >>
No, what I meant was, perhaps the house wasn't actually suffereing from subsidence, but an overcautious surveyor said it did, and the insurers paid up. The vendor might then have got an opinion from another surveyor who said it was fine, so just kept the money instead.
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Something wrong with story.
Insurers do not pay up.. they pay against receipts for work done.
Story is partial and I suspect more hidden.
Last edited by: madf on Thu 20 Jan 11 at 15:19
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Insurers do not pay up.. they pay against receipts for work done.
>
>>>>>> so the cheque i got last year doesnt exist then?
well my bank accepted it and very nice it was too thank you
this was from an insurer of houses and contents for an estimate i submitted against my neighbour who damaged my property
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>> Insurers do not pay up..
They do, or at least they did a few years ago when we received a cheque from our insurer.
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"Insurers do not pay up.. they pay against receipts for work done."
Not necessarily so. The Insured can request a cash settlement and as long as the Insurer is happy that the Insured has a genuine claim and the estimate is acceptable there is no reason why they should not do so. The Insured is free to spend the money as he wishes
My understanding however is that the seller of the property must disclose known faults even if they are not the subject of a specific question by the buyer. I am sure however that there is a question about subsidence in the standard questionnaire that the seller would be asked to complete.
The buyer's remedy is to sue the seller
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I have no idea what the answer is, but:
PU>>"he should have disclosed it"
FT>> He should have put it on the SPIF
Where and why should he have disclosed it? Here is a SPIF.
www.kevinlane.co.uk/downloads/Sellers-Property-Info.pdf?f=Sellers-Property-Info.pdf
It specificially states:
The buyer takes the property in its present physical condition and should, if necessary, seek independent advice, e.g. instruct a surveyor. You should not give the buyer your views on the condition of the property.
An individual owns a property worth £200k. It needed £30k of work doing to it, thus the value of the property was (broadly) £270k.
The insurance company compensated the individual for the reduction in value to his property by a payment.
The individual entered into a contract with a third party to sell his property. Provided he did not misrepresent the position then I'm not sure what the problem is.
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When we sold my late in-laws house just over a year ago we received a very detailed list of questions from the buyers solicitor asking if we knew of any of a list of problems.
In the case mentioned by the OP this would definitely have put the seller in the wrong if he/she answered any of these incorrectly.
While you are not obliged to disclose anything which has not been asked in general you are not allowed to give a deliberate wrong answer to specific questions.
Solicitors are not fools any reasonable one will have made sure all the right questions have been asked.
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>> I have no idea what the answer is, but:
>>
>> PU>>"he should have disclosed it"
>>
>> FT>> He should have put it on the SPIF
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>> Where and why should he have disclosed it? Here is a SPIF.
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>> www.kevinlane.co.uk/downloads/Sellers-Property-Info.pdf?f=Sellers-Property-Info.pdf
Try section 4: 4.2.
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>>Try section 4: 4.2.
I have. And found it lacking.
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Just to say I know no more than I posted in the OP - I was asked for advice from a bank manager on behalf of a customer. It does sound like fraud but I also think that the purchaser should have had a survey (or if he did, sue the valuer for negligence).
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>> >>Try section 4: 4.2.
>>
>> I have. And found it lacking.
"
Section 4:
4.1 Are there any guarantees or insurance policies of
the following types:
(snip)
(h) Anything similar, (e.g. cavity wall insulation, COPIES underpinning, indemnity policy)?
4.2 Have you made or considered making claims under
any of these?
If yes, please give details.
"
The chap had indeed claimed under his insurance policy. He was obliged to say so.
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Interesting. I have no idea whether I am correct, and if somebody knows me to be wrong I should be most interested to hear.
However I disagree with you as I do not believe that a general house insurance policy is similar to any of the other guarantees listed.
The guarantees/insurances listed relate to the property, and are generally transferable to a new owner (and are generally worthless, but that's quite a separate matter). Look at 4.1 i which requires you to HAVE HAD WORK DONE in order to obtain the guarantee.
Now, IF he had had the underpinning done, and a guarantee had been given - or insurance had been taken out against further failure of the underpinning THEN I agree he would have something to disclose.
As it is, from the wording given, I believe that he has no obligation to disclose the position - and indeed in doing so would be going against the advice given in the introduction by commenting on the state of the property.
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Remember the buyer takes the property in its present physical condition (according to the SPIF). These guarantees relate to a future detected deterioration from its guaranteed condition in respect of specific guaranteed work to the property - not to prior deterioration of the general state of the property.
Do you need to disclose that there is damage to the laminate flooring, where that was claimable against your insurance - whether or not the insurance has paid out? No.
Last edited by: Mapmaker on Thu 20 Jan 11 at 18:20
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When we put in an offer that was accepted on a house that we found had been underpinned and had the front rebuilt of new foundations (and then withdrew the offer), I asked the solicitor wasn't the seller obliged to declare this. Apparently not was the answer and why you need a survey.
When we exchanged contracts on our current house, he also made it clear that under English law there is no comeback to the seller if you subsequently find serious problems with the house. Once it's yours then that's it.
Maybe it's more complicated because the seller took the insurance money, pocketed it and then sold the house without fixing the problem. If anyone gets anything back off the seller it will be the insurance company. I doubt if the buyers have a leg to stand-on.
In reference the house we discovered was underpinned, we didn't need to have a survey as we were paying cash and no mortgage lender involved. But I am so glad we did!
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Insurance monies - Iffy
