The Story of the Collapsing House in Finchley

Sunday, 19th April 2015 | by: William Weaver

Every now and then there is a catastrophic incident involving the construction industry somewhere in the UK. When a house collapses it gets reported in the national press and sometimes on radio and TV. It’s a dramatic event but fortunately it doesn’t happen that often.

A recently reported case involved an ordinary medium sized, Victorian, semi-detached house in Finchley. A normal suburban house of which there are millions, throughout the country.

Over the years, the house had been converted into two flats which were sold on long leases. The freehold owner held the property as an investment and had little to do with it on a day-to-day basis. The first floor leaseholder rented their flat out whilst the ground floor leaseholders were owner/occupiers starting a new family and running their business from home.

The ground floor leaseholders decided that they would follow the trend of many other London homeowners and create more space in their property by excavating the basement. As far as I am aware, they went through all the standard procedures getting plans drawn up and engineers to calculate the design, obtaining landlord’s consent for alterations, obtaining planning permission, Building Control approval and Party Wall Awards were put in place with any affected neighbours.

In an interview on Radio London the owner stated that they put the plans out to a series of different contractors and accepted a quote from a contractor who was mid-price. In discussion with this contractor, they were assured that he had carried out substantial basement excavation contracts in the city, that he was a member of the Guild of Master Builders and that he was experienced in this type of work. They queried his insurance policy, insisted he take out a policy to cover this type of work and held a telephone conversation with the insurers who informed them that all was well.

Works commenced and the contractor started excavating the basement. The tenants of the top floor flat were two Australian girls travelling around Europe and had little to do with the excavation works nor would they be expected to have any involvement. On the ground floor, the husband was out of the country on business whilst the wife was living in the property during the contract period.

The Building Control Officer would have had a duty to inspect the construction works on a regular basis and did so. The party wall surveyor was not under any duty to inspect the works on an ongoing basis and there were no other provisions for any contract supervision.

During the process, the contractor excavated under the front elevation to give access for machinery and then continued to excavate around the perimeter of the property where he ought to have been putting sections of reinforced concrete to support the walls above as the excavation proceeded.

In the weeks approaching Christmas 2013, there was a lot of rain and there were reports of the builder pumping frantically throughout the day night.

It was on the Saturday that massive cracks started appearing rapidly throughout the ground floor flat and in the first floor flat. The occupants who were all at home at the time panicked and ran out of the house and alerted the neighbours. The Local Authority were called and attended and declared that the structure was unsafe and had to be evacuated. The neighbours both sides were similarly evacuated, the road was cordoned off and the site secured.

The Local Authority found emergency accommodation for the families of the houses either side and for the two Australian girls and the heavily expectant wife and her Father-in-Law who had been residing in the ground floor flat. On the Sunday, the entire flank wall of the house fell away exposing the house to the elements and the house tore itself away from its neighbouring semi-detached house.

It was quite obvious that the structure was now in a perilous state, ready to collapse at any moment and hopelessly beyond repair.

The Local Authority commenced demolition promptly using a cherry picker and dismantled the property from the top down. They managed to retrieve a lot of clothes, personal items, jewellery and passports in an attempt to re-build the lives of the occupants. When they managed to get down to the ground floor, they even managed to retrieve the laptop for Mr Goldswain, the ground floor owner, which had all his business details and records in order that he suffered minimal business disruption.

Obviously they could not retrieve everything and had to prioritise matters of immediate importance whilst also dismantling the house in a safe manner.

The house was eventually reduced to a building site with hoarding all round and flying buttresses supporting the two neighbouring houses. The road was re-opened and the site was declared safe.

The two neighbours returned to their properties having had a massively disrupted Christmas. I assume that the two Australians could continue with their tour making an insurance claim for loss of clothes, camera equipment etc. and being able to put it down to an extraordinary experience. The ground floor flat owners who had carried out the works invoked their insurance only to discover that their insurers denied that they were liable, furthermore, the contractor’s insurers claimed that they were not liable.

A Court case ensued heard in the High Court by Mr Justice Akenhead who found that the incompetence of the builders was likely to blame for the collapse and awarded damages in the sum of £290,000 to Mr & Mrs Goldswain. The contractors meanwhile had been placed in liquidation and it would appear that the homeowners were unlikely to see a penny of their compensation.

The freeholder and both long leaseholders are now left owning a building site with nothing on it. The freeholder can still claim the benefit of the ground rent although this is likely to be low. The two leasehold owners have to continue to pay their mortgage.

Whilst fortunately no one was killed, the couple’s baby was born healthy and they are renting another home, the outcome to date is a very unsatisfactory state of affairs.

How the parties resolve this matter will unfold in due course. Meanwhile, the matter is of note as it could happen to any of us in any of the thousands of basement dig-outs which are taking place predominantly in the south-east but throughout the country.

In this case, I think there are several issues which any homeowner could address:-

1. When going out to tender, where did they get their information from for deciding who to invite to tender? In this instance, there were professionals involved, there were engineers, there may have been an Architect and there may be a list of approved contractors held at the Local Authority. All in all there were several avenues to explore to seek advice on whom to invite to tender.

2. In the tender process, the home owning couple discussed the matter with the contractors and were assured of his prior experience but they did not visit any sites nor did they check his accounts despite their being investment bankers. In hindsight, they comment that had they checked his accounts, they would have realised that his claims of experience were completely unfounded.

3. Any home owner could ask for references, previous satisfied clients and visit sites, I understand this was not done in this case.

4. The name of the company, AIMS Plumbing & Heating Limited, would appear to be a good indication that basement excavation was not their primary business.

5. The insurance policies appear to have been wholly inadequate. An owner should consider requesting a copy of contractor’s insurance details and digging out a copy of their own home insurance – ideally all documents should be checked by an insurance specialist to ensure that the works are properly covered and that the insurers are properly notified.

6. Ultimately, it appears that the contractor did not know what he was doing and there was insufficient or inadequate site supervision and contract administration. For a fee of £2,000 or £3,000, it ought to be possible to obtain a site agent who can independently inspect the site, inspect the contractor’s works and report back to the home owners and, basically, be the eyes and ears of the home owner and offer professional advice during the period of the works.

I think the lesson to be learned is that these basement dig-outs don’t often go wrong but when they do, the results are catastrophic. They can be fatal and they are almost always significant life changing events. They can also be ruinously expensive.

Bearing that in mind and the cost of the works which may be in the region of £30,000 to £50,000, it would appear sensible to carry out detailed due diligence one’s self or to employ the services of a professional to do the pre-contract due diligence and contract supervision during the period of the works.

I will continue to follow this case but even though it has been two years since the event, I don’t expect to see a conclusion reached for another two to three years.

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