'Left in property prison' - My retirement investment flat is unsellable

A flat in a high-rise development was meant to be an investment for Jayne MacGregor's retirement - but 18 years later, it is unsellable.

She is one of 30 leaseholders at the Aurora complex in Swansea filing a fraud claim against Zurich Insurance in the High Court, accusing the firm of issuing 10-year home warranties despite not inspecting their properties.

A former employee of the insurance firm claims defective flats were not inspected because surveyors were overburdened, while a solicitor said owners were now trapped in a "property prison" unable to sell.

Zurich said it refuted the suggestion that insurance documents were issued improperly or that it misrepresented inspection findings.

Residents began moving into the Aurora flats after 2008. For Jayne, the purchase quickly turned into a nightmare.

Extensive defects have made it "unsellable", she said, and described it as "a noose around [her] neck".

"The stress brought on asthma attacks," she added.

"Really, now, I should have a simple life."

Problems with water ingress came to light at Aurora shortly after construction was finished, with fire safety defects also found later.

It is claimed that fire doors and fire breaks between apartments were "inadequate".

"In 2017, with the Grenfell disaster, it really ramped up everybody's stress levels," said Keith Evans.

He is one of the flat owners leading the proposed legal action against Zurich.

"We feel deceived by their actions in 2008 when these properties were built and sold," he added.

Although their 10-year warranties have expired, flat owners feel they have lost out financially since many of their apartments remain unsellable.

Zurich said it was not and never has been responsible for losses suffered by Aurora leaseholders. It added that no claims had been paid under the 10-year warranty for the development.

Aurora's developer, Persimmon, is currently carrying out a full-scale remediation of the building to fix the extensive water ingress problems and reported fire safety defects.

The project is due to be completed by the end of 2026.

Leaseholders claim Zurich surveyors bypassed their own electronic inspection system to issue handwritten cover notes as proof of their insurance policy.

Residents at the Aurora development said if they had realised their cover notes were issued in this way and without final inspections, they would not have completed the purchase of their apartments.

The cover note documents are needed by lenders to approve mortgages.

A former Zurich employee, who spoke to the BBC anonymously, alleged defects were not identified during construction because not all properties were inspected.

They blamed an increased workload after Zurich said it was exiting the home warranty market a year after the 2008 financial crash.

"There simply weren't enough hours in a day [to do all the jobs]," they said.

"I can only speak for myself and it happened three or four times to me. [An] email instruction came down [and said] I've issued the cover notes, can you inspect them next week?

"Well, people are living in them next week so I can't go and inspect them. It was a ridiculous situation.

"I knew what we were doing wasn't right but I still needed to keep shoes on feet and food on the table."

Zurich said inspections carried out as part of its risk management programme did not form any part of the contract with the homeowner.

Leaseholders have also taken action in other parts of the UK as the safety of high-rise apartment blocks was brought into sharp focus following the Grenfell fire disaster in 2017.

In 2019, a judge ruled that leaseholders at New Lawrence House, Manchester, "proved their case on deceit" against Zurich.

His Honour Judge Stephen Davies said the building was "seriously defective" and required "major and expensive repairs".

According to court papers, the extensive list of defects at the development included doors with missing Juliette balconies, steel work without fire protection and no fire protection system within walls and ceilings between apartments.

Judge Davies said he was "satisfied" a senior Zurich surveyor signed off on the apartments because they were "so desperate to be finished with the development".

Leaseholders received millions of pounds in compensation as a result of proceedings.

In 2022, residents at Wales' tallest building reached an out of court settlement with Zurich following a similar deceit claim.

At another development in Bournemouth, leaseholders said their claims had been turned down by Zurich for a number of years.

They were eventually compensated through the Financial Services Compensation Scheme after years of living with excessive damp and unsafe balconies.

"It seemed catastrophically horrific at the time. It felt never-ending," said Lydia Turnbull, whose flat at the Snowdon Mount development remains unsellable.

She said relationships broke down and another flat owner went bankrupt as a result of paying thousands of pounds to fix extensive defects.

Solicitor Martin Scott, who specialises in complex construction disputes, said: "The reality is, if you're an owner-occupier of one of these apartments, you're living in a mortgage cage or a property prison which you can't get out of.

"You can't re-mortgage because nobody will touch you where there are fire issues, you can't sell because there's no market.

"There might be a very limited market for cash buyers prepared to take the risk. And the truth is a property purchase is the biggest purchase any ordinary person will make in their lives so if that goes wrong then their life goes wrong.

"So you've got to find a fix or you have to be able to recover compensation for them to be able to move on."

A Zurich Insurance spokesperson said: "We appreciate the stress this situation has caused for leaseholders.

"Responsibility for repairing defects at Aurora lies firmly with the developer, Persimmon Homes.

"The Zurich policy provides protection if the developer becomes insolvent and cannot carry out repairs.

"We hope that Persimmon is able to resolve this situation for leaseholders as quickly as possible."

The spokesperson added that the firm was aware of workload concerns around 2009, and it took "every reasonable step to support surveyors" and to "maintain high standards".

Swansea council was responsible for ensuring construction of the Aurora development complied with building regulations, however no legal action has been taken against them.

The council said as it was not party to any current proposed legal action it was "unable to comment".