What is Subsidence of a house?

A property investor we know engaged a buyer’s agent to find them a suitable property. The buyer’s agent found a renovated, older style home on a large corner block near a major shopping centre that ticked all of the boxes and was about $20,000 less than comparable properties on the market. The buyer’s agent noticed that there was a 25mm gap between the floor slab and the skirting board in the living room and mentioned this to me at the time of booking the inspection.

Here are some of the observations made at the inspection:

1.     The external brick walls of the house had been rendered. Cracks up to 3mm wide were present in the rendered external brick walls.

2.     I noted neat rectangular patches of newer concrete to the paths around the external walls of the house.

3.     Some vertical joints had been cut into the external brick walls.

4.     The door frame to the garage was out of square by 60mm.

5.     The large timber patio was located only 500mm from the rear boundary.

6.     The garage was built right onto the side street boundary without a fire-rated wall.

Here is some of the advice given to the buyer’s agent from the Building inspector:

1.     It appears that the house has had significant damage from subsidence. The owner had the house underpinned, rendered and articulation joints were installed. Some damage, such as the tiled concrete floor of the living room being out of level and the garage door frame being out of square, were not rectified. Further cracks indicate that there has been more movement since the rectification works have been carried out.

2.     The garage and patio are built less than 900mm from the boundary without a fire-rated wall. This indicates that these structures are illegal.

The buyer’s agent decided not to proceed with the purchase mainly because:

1.     More damage had occurred since the underpinning. The long-term consequences of more damage could not be known. There is excessive risk of future repairs and therefore a chance of reduced re-sale value.

2.     Illegal structures will make the property more difficult to insure and could reduce re-sale value.

One day I hope that every property will have an inndox and serious defects like subsidence will be disclosed to buyers. Unfortunately we still have “Buyer Beware” laws operating in much of Australia and this means that it is likely that this property was sold to an unsuspecting buyer who will eventually learn theat they have bought a problem.