Home » A Guide To Selling A Property With Subsidence

A Guide To Selling A Property With Subsidence

(February 19, 2020)
The Times recently published an article about selling a home with subsidence.

 

A concerned homeowner contacted the publication, with their worry,

“A neighbour’s tree has caused subsidence to my property: this is the second time this has happened. The first time was about 12 years ago: they cut down the offending tree and left this one standing, which has now led to additional problems. My insurers have surveyed the damage and confirmed it is caused by the whitebeam that was left standing. I have now been told by a “friendly neighbour” that my property is worthless, as a buyer would not be able to obtain a mortgage. Is this correct? One subsidence claim is bad enough, but two is terrible.”

Geobear’s CEO, Otso Lahtinen would like to offer an alternative position to this important yet challenging issue. He will address domestic subsidence from the homeowner, insurance company and surveyor perspective.

“Most UK homes are insured against subsidence. From a policyholder perspective, it can seem like an easy option to file an insurance claim over subsidence. However, especially in the case of clay and trees as described by Ms. Eagling, claiming repair from insurance may lead to a process of monitoring the problem for years to come which can be tricky especially if one is planning to sell a property within the near future.

Furthermore, a large majority of subsidence claims get repudiated according to industry knowledge. In those cases, the homeowner has an option to proactively seek out the root cause for the problem and solve it according to professional advice.

In practice, this means consulting a surveyor / structural engineer to diagnose the problem and appointing a suitable contractor to solve it. The upside is that the problem can be dealt with there and then in a permanent manner, downside the cost will be borne by the homeowner. In most cases, the cost of dealing with the problem immediately will be fractional compared to not addressing the problem and suffering consequences on the sale value of the property.

There are thousands of chartered surveyors in the UK who work with domestic properties, either directly with homeowners or through house builders, loss adjusting companies or other property owners/ operator groups. From their perspective, they look to diagnose the client’s problem and potentially recommend a solution to it.

In the case of subsidence, this is a challenging task and often requires various technical reports such as site investigation, drainage, and tree root investigation reports. A good idea of how subsidence can be detected is described in RICS Guide for consumers. Some of the most common technical options to deal with subsidence include the removal of trees, installing root barriers, structural underpinning, and geopolymer injection.

Insurers deal with subsidence frequently and it is challenging also from their perspective. A small amount of indemnity cost compared to overall indemnity spend but vast time and personnel requirements to manage the subsidence related claims that amount of 12,000 + in a normal year, (ABI statistics) with the tendency to remain open for several years.

A large majority of subsidence claims are not accepted as valid because of lack of technical evidence. On the valid claims, some of the most common solutions insurance companies end up actioning are tree removals and/ or long term monitoring of the property that has been diagnosed to suffer from subsidence.

The last two years have brought about an innovative approach to create a win-win situation for the insurance policyholder, loss adjuster/surveyor company and insurance company pioneered by Legal and General Insurance, Sedgwick loss adjusting and subsidence contractor Geobear.

The new approach helps the policyholder solve the sticky issue of subsidence within few months from raising the claim, surveyor/loss adjuster to save on administrative work and improve customer service and insurance company to add better value to policyholders by dealing with subsidence claims faster. The new approach has been rewarded by Insurance Times and Insurance Post as claims cooperation of 2019, because of the cost and time savings it has created for the whole supply chain.

 

To sum up, solving a domestic subsidence problem does not need to be a complex, expensive and time-consuming issue and there are more and more innovative ways to minimise headaches around it. Geobear and its predecessor Uretek have treated 10,000+ subsidence cases since 1983 and created a globally adopted, nondisruptive subsidence repair solution.”

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