I mentioned in a previous blog entry that I have done quite a few professional negligence claims concerning old mines in South Wales. I have a couple on-going at the moment but thought I would share with you one that I completed a few years ago.
It was a young woman who I represented. She had bought a rundown property with the assistance of a mortgage which she intended to do up and sell on in the hope that she could make a bit of money to put down as a deposit on a property for herself. She had got it all planned: there had been a death in the family and she had got a small inheritance sufficient to pay for the works it needed and to keep her going for 3-4 months whilst she did the property up herself.
The property she found in South Wales was an absolute bargain – rock bottom price which was confirmed by a mortgage valuation. The client – I will call her Lisa – did not have enough money to fritter away on a full survey but in any event, she felt it was not needed as she intended to carry out so much work to the property.
Lisa instructed a solicitor to undertake the conveyancing. For some bizarre reason, the solicitor did not carry out a mining enquiry which I found extremely surprising given the area the property was located in. The insurance company tried to argue Lisa was on such a tight budget, she would have refused if it had been offered. I pointed out that given the area was a former mining district, the solicitor should have told her why such an enquiry was advisable. If she had refused at that stage, the insurance company’s argument might have some merit.
Lisa bought the house and started the works.. They were more extensive than she had realised but the work she had done should have put value on to the property already. She therefore looked to re-mortgage to take some equity out of the property to continue the works. A mortgage valuation was obtained which specifically stated that, subject to satisfactory mining reports, the house had indeed increased in value.
Lisa’s new solicitor carried out a mining search and found that there was an uncapped mine right in her back garden! The mortgage company understandably refused to offer a new mortgage to her.
On the face of it, Lisa had a great claim against her solicitor. In claims like this, a client is able to get damages either for the cost of repair or the diminution in value of the property, whichever is the lower. Discussions with surveyors in the area said that the cost of capping the mine could be astronomical: £220,000 was one figure mentioned. Nobody could give a quote without carrying out extensive surveys of the mine itself.
As for diminution in value, did I mention that the house was an absolute bargain? I am afraid that it still was even with the knowledge of a mine in the back garden.
Things were looking pretty grim for Lisa. If she had known about the mine, she would not have bought the property but it had been such a bargain at the outset, there was no diminution in value. She had sunk all her money into the renovations and now was struggling to keep up with the mortgage repayments, the mortgage company breathing down her back.
Ultimately though, Lisa was lucky – not that it felt that way at the time. It rained. It rained so hard that part of the back wall of her house collapsed. Turned out that the mine had been causing subsidence to the property for some time but as Lisa had not had a full structural survey done, it had not been noticed. I was therefore able to make a claim for her under the Coal-Mining (Subsidence) Act 1991, an act which means the Coal Authority are required to make good any damage caused by subsidence. In this instance, the cost of repair was too great and so they bought the property off of her. She lost her inheritance but it was sufficient to pay off the mortgage company.
So be warned. If you are thinking of moving to an area where there have been mining works, I suggest you talk it over with your conveyancing solicitor.