Subsidence? What you need to do before selling your home
You want to sell your home which has suffered subsidence. What should you do to maximise its marketability and reduce the risk of the sale falling through?
How does subsidence manifest itself?
Typical effects of subsidence include:
- Cracks appearing on each side of a wall and zig-zag cracks appearing in external brickwork.
- Doors and windows sticking and getting worse over time, rather than just seasonally or in wet weather.
- Door and window frames becoming visibly out of "true", or frames becoming detached from adjacent walls.
Subsidence can be remedied
Subsidence can occur from a number of causes, but it is usually possible to remedy it.
Buildings insurance generally covers damage from subsidence so the first step will be to contact your insurer – indeed failing to do so may lead to the insurer voiding any subsequent claim. The insurer will then arrange for a surveyor to inspect to property.
The surveyor will determine whether subsidence is present and what works are necessary to remedy the issue. The insurer will then arrange for a surveyor to inspect the property.
The surveyor will determine whether subsidence is present and what works are necessary to remedy the issue.
The good news
In many cases, the surveyor will confirm that any movement is "historic", meaning that the property is unlikely to continue to subside and that further remedial action to fix the problem is not required.
Where subsidence is ongoing, or has resulted in more than merely superficial damage, the seller wishing to market their property must address the issue or risk trying to sell an unmortgageable, unsaleable property.
Can you ignore the problem?
Many sellers think they can get away without telling the buyer anything about problems such as subsidence.
Some sellers assume it is the buyer's job to check out the property, and if the buyer fails to spot any defects, that is their problem.
Indeed, there is some truth to the notion that ultimately it is the buyer's responsibility to investigate a property.
However, hoping the buyer won't spot the issue is a short-sighted strategy and can have major repercussions for the seller.
Once the buyer discovers that the property has suffered from subsidence, there is a risk that:
- the sale may fall through
- the buyer may lose their mortgage offer
- the buyer may significantly reduce their offer.
Usually, the best outcome will be that the sale is delayed while the defect is investigated and the cost of repair is worked out.
If there is no upper chain, the seller may not care about any delays.
If there is a chain, the seller could easily lose their purchase.
The best course of action may depend on whether you are aware of previous subsidence and know whether remedial work such as underpinning has been carried out.
Seller's Property Information Form
All sellers are required to complete an information form which will be sent to the buyer's conveyancing solicitor. This form, known as the TA6 Seller's Property Information Form (or SPIF) contains very detailed questions about the property.
It makes sense to address the queries raised in this form before putting the property on the market. Otherwise, delays will occur which may cause any buyer to withdraw.
One question on the TA6 asks for details of any building works which have been carried out (which would include underpinning and other remedial works). The sellers are also requested to supply a copy of any warranty or guarantee for any underpinning and other works:
Works carried out during current ownership
If work has been carried out during the time you have owned the property then you should find all the relevant paperwork and send this to your conveyancing solicitor when you send in the completed SPIF from.
Works carried out by previous owners
Where you think that subsidence occurred sometime before you purchased the property then you should ask the solicitors who handled the purchase conveyancing for you to provide any relevant information about underpinning and supply supporting documents (unless you already have them).
Building insurance premiums
A further question on the SPIF form asks whether existing building insurance is subject to any high amount of excess, or the premiums are abnormally high, or whether cover has been refused altogether.
When subsidence has previously occurred it is likely that a claim under the building insurance will have been made. In this case, it is likely that any insurer will require a higher excess in the future (i.e. the amount which the owner would have to pay themselves if a future claim is made) and further cover for subsidence may even be refused.
Can you sell a property affected by subsidence?
You may suspect that the property is suffering from subsidence that has not been treated, or that the property has been underpinned and further subsidence has occurred. Under either of these circumstances, you could try to sell the property "as is".
Caveat emptor (buyer beware)?
The property law principle of "buyer beware" (or "caveat emptor" in Latin) might tempt a seller to keep quiet, hoping that the buyer does not discover the problem. Buyers will usually have some sort of survey carried out before exchanging contracts, particularly if they are buying with a mortgage.
As a result, there is every likelihood that the surveyor will discover any major defects and that the buyer will then pull out. Even if the buyer still wishes to proceed with the sale, their mortgage lender may refuse to lend on the defective property.
If you inform a buyer, either via the TA6 form or otherwise, that there are no defects and the buyer later discovers that there are issues, you may face a claim for misrepresentation. A claim is particularly likely in cases of subsidence, as the impact on the property's value and the cost of repair can both be significant.
You would be expected to pay the new owner damages reflecting the losses they have incurred, on top of any legal fees.
Research subsidence issues before marketing the property
Misleading the buyer is not a viable option, and there is slim chance that both the buyer and an experienced surveyor will miss any subsidence. Sellers should, therefore, investigate what they can do to fix defects before they market the property.
Even if you do not undertake the work before you sell the property, potential buyers will appreciate knowing the expected cost and scope of the work.
Presenting the buyer with a costed solution alongside the problem could make the difference between the buyer making a successful, reasonable offer and the sale later collapsing, once the buyer discovers the extent of the subsidence.
Should you speak to a solicitor before putting your property on the market?
When selling a property you should speak to a conveyancing solicitor before you put the property on the market. Discussing the property with a lawyer means that they can sort out legal problems at the earliest stage. This will prevent delays arising when you do find a buyer.
Most property solicitors work on a "no sale, no fee" basis. As such, taking a proactive approach won't cost you any more than leaving it to the last minute. It is not impossible to market and sell a property affected by subsidence. It does, however, require some preparation and possibly some action on the part of the seller.
Getting legal advice early is the best way to ensure that any action you do take is effective. This strategy will also give you the best chance of a successful sale.