Phantom house survey

[GKaplan]

Any retired surveyors (or bankers) on here? Five years or so ago, a friend bought a house in Chapel-en-le-Frith, Derbys, with a loan from HSBC. The bank's survey (among other things) said NO SUBSIDENCE. Recently, he has been doing some renovations and invited a structural engineer around to check something. The engineer immediately spotted historical subsidence in one part of the house. When my pal approached HSBC, they said (to his surprise) that the survey had been a "desktop survey" so nobody had actually been to the house and that they were not liable for any structural faults because the survey was really for their eyes only to see whether the bank should make the loan or not. Does anyone have any thoughts on this? OK, in hindsight my friend should have organised and paid for a full structural survey. But he was under the opinion that if any fault or faults existed they would be spotted by the surveyor. (He wasn't living in the house at the time). He didn't presume for a moment that a surveyor wouldn't leave his office. Advice, thoughts, appreciated.

If this is a survey undertaken by the bank then yes this is common. This sort of survey is for the bank and is more about recovery value if the bank needs to sell the property. Sometimes a ‘drive by’ assessment is sufficient, sometimes they visit the house. We have always instructed our own surveyors as a result.

A desktop survey is just that , it’s by the bank for the bank to assess the value of the property that the bank is lending money for and to ensure the value is adequate for the money being lent
if the bank’s survey was done in person as it occasionally is they would simple be assessing the value again
It is up to the purchaser to get a more through survey done that covers structure

it is not legally possible for your friend to rely on the bank’s survey as it was done for the bank and not for the buyer. Your friend has no rights in respect of the survey whatsoever. This is why a buyer should obtain a survey (ideally a full structural one).

It was a bit of a daft idea not to get a proper survey done.

Yep your friend has been niave here. There will be no recourse from HSBC. Desktops are standard practice.

It’s always made pretty clear in the paperwork that the basic bank survey is just that; not a detailed survey on the condition of the property. I don’t think your friend has any recourse.

There are usually 3 levels - valuation (often free), homebuyers (anything visible but not really an investigation) and full structural.

The desktop survey is for the bank to assess whether the house is roughly worth the mortgage amount and thats all.
Its no indication of condition and that is usually made clear

Wouldn't any previous owners have to declare subsidence on the the TA6 forms sent out by the solicitor? Possible case for claiming misrepresentation I would have thought.

They should stop calling them surveys because they really aren't. They're just valuations to make sure the bank aren't lending 200k when the house is only worth 100k.

An actual survey is what a future homeowner pays a surveyor for separately to see if the house is about to fall down.

I would advise your friend looks back closely at their TA6 form and also look at what searches their conveyancer carried out and discuss with said structural engineer whether the cause of subsidence should have been flagged on their searches.

More info here:

www.homesellingexpert.co.uk/guides/subsidence-do-you-have-to-declare-it-when-selling-your-house

NB: If you suspect or discover that your property has subsidence, you will need to inform your insurer as soon as you become aware of the problem.

^ they need to do this

The bank survey is a financial survey, not structural.

This sort of survey by the lender is sometimes called a valuation survey. It is purely for valuation purposes and if the buyer wants a proper survey, they pay extra for one.

There's nothing he can do now. The only way to try to avoid this situation is to pay for a full structural survey. He's been there 5 years so I really wouldn't worry about it.

The subsidence is historic, why would they be a need to do anything?

Your friend was an idiot for not getting a full structural survey at the time of purchase and this is the direct consequence of this. entirely his fault.

If he has been told about it in writing he will need to tell his insurer, who will probably decline to renew cover. Has underpinning been done? If so the vendors should have declared it.

Historic subsidence is usually not a problem, in some areas every house has some. Buying without your own survey is foolish, the ordinary survey would probably have flagged it and it would be up to the buyer whether to then do a full structural survey to establish if any remedial work is necessary.

If it was a desk survey they will have looked at general information for the area for risk of subsidence, in the same way they will have looked at whether the area is subject to flooding,

If it's within 30 years and hasn't been underpinned, and he is with a standard insurer, they will be bothered.

The bank only do a survey usually at most a drive by but more usually a look online to check the house is worth what they are lending.

They usually go to great pains to advise you that you should get your own survey to look into condition of the building.

I agree, they do make it clear it’s not a structural survey.

Some people choose not to pay extra for a proper survey (I’ve done that myself so no judgement) but then you have to accept the risk you’re taking.