Insuring against a bad survey

SURVEYORS who fail to notice the symptoms of subsidence can be collared for compensation, through legal protection insurance. Legal action against a surveyor is likely to be prohibitively expensive for an individual, but if the case is backed with an insurance policy the risk-reward balance improves.

Independent on Sunday reader George Price (not his real name) contacted the paper so that other readers could benefit from his experience. His Sussex house has a problem from subsidence, caused by dry weather, clay soil, nearby vegetation and shallow foundations. The problem is not severe and has probably been put right by expert pruning of trees and bushes. But the symptoms are likely to put off any potential buyer should Mr Price want to sell in the future.

If Mr Price had not taken out a legal protection policy, he would have been unable to afford to sue the surveyor, and the loss would have been his alone. In fact he had two policies - one with the Law Club (formerly branded Allianz), for which he pays pounds 67 a year for pounds 50,000 of cover, and another with Hambro, costing pounds 7.50 as part of his home contents policy to give him a further pounds 10,000 of insurance. This slightly complicated things, as both insurers had to agree that Mr Price had a good case. They will split the cost of the action between them.

Although Mr Price's case has not yet come to court (which is why his name is being withheld), he and his insurers are confident of success. External cracks had been repaired by a previous owner and were only spotted by Mr Price when they reopened during last summer's hot spell. Internal cracks had been diagnosed by the surveyor as being caused by a "slight weakness of roof timbers", supposedly put right at the vendor's expense before the sale of the house was completed.

There might also have been a valid case against the seller, as either he or a previous owner must have known that there had been subsidence trouble but had failed to mention it. "If the vendor knows of a defect he is obliged to advise the estate agent or purchaser," says Geoff Roscoe, a solicitor with the Rawthorn, Edelsthorns practice in Leyland, Lancashire.

Rawthorn, Edelsthorns is promoting a new insurance product, Home Buyer Legal Protection, that provides pounds 25,000 of legal cover for three years after home purchase. The policy costs a one-off sum of pounds 40 and is underwritten by Europ Assistance. It covers not just negligence by surveyors, but also contractual disputes with builders, sellers or mortgage lenders.

Mr Roscoe says that home buyers should be willing to challenge surveyors whose reports turn out to be wrong. "Anything that is patent, they have a liability for," he says. "If it is latent there is no liability." In other words if the surveyor should have identified the problem then he has a liability, but it it wasn't an obvious problem he has a good defence.

The Home Buyer Legal Protection policy was launched by another solicitor, Raymond Connor. He had been stirred by media reports of surveyors who had got away with shoddy surveys. "Surveyors often put in more caveats than reports," he says, "but the law is clear that if they should find a defect they are liable."

This view is shared by the Halifax Building Society, which advises buyers to obtain either a home buyer's survey or a full structural survey rather than just a basic valuation report. "The liability of a surveyor does depend on the type of report commissioned," points out a Halifax spokeswoman. "A basic valuation report is for the building society, though there is a duty of care to the customer. If it is a home buyer's report it doesn't matter who has engaged the surveyor, there is a legal liability if there is negligence. But the negligence has to be an omission that leads to a loss in value."

Where negligence is proven, the liability of a surveyor is for that loss in market value compared with the valuation, not for the cost of putting a fault right. In Mr Price's case the liability calculation works to his advantage, as remedial work is cheap, and the claimed drop in market value is higher.

Surveyors will normally have professional indemnity insurance, so are unlikely to pay personally for any negligence. The surveyor's insurer will usually pay up when a good case is made by the home buyer's legal protection insurer. Where the surveyor has no indemnity insurance, or is otherwise unable to meet the costs, there is a possibility that action will be successful against the mortgage lender if it engaged the surveyor, who was therefore acting as the lender's agent.

The Law Club says that although its policy only covers civil cases, its 24-hour helpline will also advise on any personal legal problems, such as providing the number of a suitable solicitor if a client is arrested. The most common call on the Law Club's policies are for holiday disputes and personal injury claims. The policy carries an excess of pounds 50.

DAS is another provider of legal protection cover, selling policies through mortgage lenders. The policies usually cost between pounds 10 and pounds 15 a year.

Home Buyer Legal Protection 01968 678989; DAS Legal Services 0117 929 0321; Legal Protection Group 0181-652 1313; Law Club 0345 078755.

Start your day with The Independent, sign up for daily news emails
News
Sir David Attenborough
people
Life and Style
Young girl and bowl of cereal
food + drink
News
Comic miserablist Larry David in 'Curb Your Enthusiasm'
peopleDirector of new documentary Misery Loves Comedy reveals how he got them to open up
Arts and Entertainment
Henry VIII played by Damien Lewis
tvReview: Scheming queens-in-waiting, tangled lines of succession and men of lowly birth rising to power – sound familiar?
PROMOTED VIDEO
Sport
football
Arts and Entertainment
'The Archers' has an audience of about five million
radioA growing number of listeners are voicing their discontent; so loudly that even the BBC's director-general seems worried
News
i100
Arts and Entertainment
Ready to open the Baftas, rockers Kasabian are also ‘great film fans’
musicExclusive: Rockers promise an explosive opening to the evening
Life and Style
David Bowie by Duffy
fashion
Arts and Entertainment
Hell, yeah: members of the 369th Infantry arrive back in New York
booksWorld War Z author Max Brooks honours WW1's Harlem Hellfighters in new graphic novel
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
News
advertisingVideo: The company that brought you the 'Bud' 'Weis' 'Er' frogs and 'Wasssssup' ads, has something up its sleeve for Sunday's big match
Arts and Entertainment
tv
News
i100
Environment
Dame Vivienne Westwood speaking at a fracking protest outside Parliament on Monday (AP)
environment
Life and Style
tech
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Recruitment Genius: Technical Report Writer

£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...

MBDA UK Ltd: Indirect Procurement Category Manager

Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...

Recruitment Genius: Web Developer - PHP

£16500 - £16640 per annum: Recruitment Genius: This fast growing Finance compa...

Day In a Page

Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee
World War Z author Max Brooks honours WW1's Harlem Hellfighters in new graphic novel

Max Brooks honours Harlem Hellfighters

The author talks about race, legacy and his Will Smith film option to Tim Walker
Why the league system no longer measures up

League system no longer measures up

Jon Coles, former head of standards at the Department of Education, used to be in charge of school performance rankings. He explains how he would reform the system
Valentine's Day cards: 5 best online card shops

Don't leave it to the petrol station: The best online card shops for Valentine's Day

Can't find a card you like on the high street? Try one of these sites for individual, personalised options, whatever your taste
Diego Costa: Devil in blue who upsets defences is a reminder of what Liverpool have lost

Devil in blue Costa is a reminder of what Liverpool have lost

The Reds are desperately missing Luis Suarez, says Ian Herbert
Ashley Giles: 'I'll watch England – but not as a fan'

Ashley Giles: 'I'll watch England – but not as a fan'

Former one-day coach says he will ‘observe’ their World Cup games – but ‘won’t be jumping up and down’
Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

Greece elections

In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
Holocaust Memorial Day: Nazi victims remembered as spectre of prejudice reappears

Holocaust Memorial Day

Nazi victims remembered as spectre of prejudice reappears over Europe
Fortitude and the Arctic attraction: Our fascination with the last great wilderness

Magnetic north

The Arctic has always exerted a pull, from Greek myth to new thriller Fortitude. Gerard Gilbert considers what's behind our fascination with the last great wilderness