I bought a house 15 years ago through an agent. I bought it to renovate but waived a building inspection. I found out

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Customer: I bought a house 15 years ago through an agent. I bought it to renovate but waived a building inspection. I found out some time after the sale went through it had a house fire and the roof had been replaced by a builder who did a shoddy job. I didn't think there was much I could do but now I am not working and half the roof blew off in high winds and I can't afford to fix it. I have never been able to as have health issues. I still have a small mortgage but no longer live there and I don't think insurance would pay. What the best way I can protect myself?
JA: What steps have you taken so far? Have you prepared or filed any paperwork?
Customer: No
JA: Where is the house located?
Customer: Otago
JA: Is there anything else the Lawyer should know before I connect you? Rest assured that they'll be able to help you.
Customer: I live with my boyfriend now but don't want him to be affected legally by this
Answered by Chris The Lawyer in 3 hours 1 year ago
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Chris The Lawyer, Expert

Hi My name is ***** ***** I am a New Zealand lawyer based in Wellington with more than 42 years of experience. I am here to help with your questions.

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Chris The Lawyer, Expert

Why don’t you think this would be covered by insurance?

Customer
Hi Chris, I did tell the bank that I had bought it to renovate it so they only covered me for the purchase price which at that stage was $50,000. But, the roof was in worse condition than I thought and although my partner has been working on the place stripping it out internally, the roof wasn't a job he could do as he's not a qualified professional. I personally don't have the money to do it now and because the roof was in such poor condition because of the way it was remediated after there had been a house fire I wasn't told about and didn't realise when I got it insured, I think they would cancel my insurance and then the bank would want their mortgage settled. What are your thoughts?
Customer
I mean I told the I insurance company I had bought it to renovate it when arranging insurance.
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Chris The Lawyer, Expert

That shouldn’t matter. If they were told you were renovating then that was what you needed to say. I suggest you discuss this with them and see what they can do

Customer
I am concerned that they will cancel the insurance as the whole roof needs replacing and I don't believe they will replace the roof?!
Customer
The problem was that I bought it 15 years ago as well...
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Chris The Lawyer, Expert

They should pay for your loss, which may cover repairs. Why don’t you have a chat without making a claim at first to see what they can do to help

Customer
Would they cancel it if they refuse a claim and they know it's got half the roof blown off? I guess I am concerned that this situation could potentially bankrupt me...
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Chris The Lawyer, Expert

The policy is meant to cover things like this. If you don’t make a claim and they find out the condition they may cancel, so you are really caught between two things but I think you are better off asking about a claim first

Customer
I'd I call them and they do cancel the insurance and inform the bank the bank will want the security released and they'll want to be paid immediately won't they? If that happens - how long will I have before they actually start bankruptcy proceedings?
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Chris The Lawyer, Expert

How much do you owe on the mortgage? There is no certainty the bank will call up the loan however

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Chris The Lawyer, Expert

The bank would sell up the property and even with the house in poor condition it’s likely to sell for enough to pay the mortgage

Customer
I owe 35,000 to the bank
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Chris The Lawyer, Expert

As an empty section it must be worth more than that, but I don’t think the bank would sell up as long as you keep up the pay

Customer
actually I could just list it with a real estate agent and sell it now?
Customer
I guess if I did that I could avoid a mortgagee sale anyway
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Chris The Lawyer, Expert

Yes, but why not see if the insurance company will fix the roof? You will get more for it then

Customer
I will give it some thought
Customer
Thank you for your advice.
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Chris The Lawyer, Expert

Feel free to ask further questions about this

Customer
Ok, I will. It's a pretty stressful time. I really think the place needs to be demolished.
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Chris The Lawyer, Expert

Insurance may cover the costs of demolition

Customer
I didn't think about that. The problem was that it was in much worse shape than I thought and I bought it as is where is. I had renovated a couple of houses in CHCH before and bought it cheaply thinking I could renovate it. Unfortunately it was hard to get tradies to even quote to fix the job and my partner had done all the relining of his home so he had been stripping it out. I obviously haven't been living there but have been checking on the place and myself and my partner have been there with work he has done. Will that affect the insurance?
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Chris The Lawyer, Expert

If it wasn’t occupied then the insurance company should have been told but it may not have been an issue if the problem was caused by weather

Customer
Ok, thank you. I will give this some thought before I call the company.
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Chris The Lawyer, Expert

Ok, I dont think it should be difficult to get an indication about cover

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