After the drought summers that have recurred since 2022, the same phenomenon is appearing in more and more condominiums: a diagonal, stepped crack runs across the stairwell wall, the cellar vault or the corner of a ground-floor flat, doors stick and tiling comes away. The common representative reports the damage, the insurer inspects it, and then the letter arrives: the damage was caused by slow ground movement, which is not an insured event. As a broker, I see that this is one of the hardest rejections to accept, because the damage is real, the amount is large and it does not result from any negligence on the building's part – and yet, under most Hungarian policy conditions, it is not an insured event. This article shows, from the condominium's point of view, where the line runs between covered and uncovered ground movement, what to do when reporting the claim and during the expert investigation, and how the general meeting reaches a decision if the foundations are behind the cracks.
- Hungarian condominium policy conditions typically treat sudden, unexpected ground movement – landslide, rock and earth falls, the collapse of an unknown cavity – as a natural peril; slow shrinkage and subsidence caused by the soil drying out is typically not an insured event, and the exact wording differs from insurer to insurer.
- In a condominium a crack is rarely the private matter of one flat: the foundations, main walls and floor slabs are typically common property, so the investigation, the strengthening and who bears the cost are for the community to decide, while reinstatement inside a flat is the owner's matter.
- After a rejected claim, the next step is not a dispute but a structural and a soil-mechanics expert report: it tells you what the actual cause is, what is urgent and what has to go before the general meeting.
Why are buildings cracking now?
The phenomenon is not the fault of the buildings but of the soil. According to a report published in spring 2026 that cites HungaroMet (Hungarian Meteorological Service) data and soil-mechanics studies, the top two metres of soil have lost practically all of their moisture, and in some places the ground is dry even five metres down. Much of Hungary has clay soil, which shrinks as it dries and swells again when it becomes wet – so the support beneath the foundations alternately disappears and returns. Because this is not even within a single building either (on the sunny side, next to large trees and around faulty drainage, the soil's water content is different from elsewhere), individual sections of the foundations subside to different degrees: this is what produces the diagonal, stepped cracks in the walls.
According to the structural engineers quoted in the report, the process has accelerated over the past five or six years and particularly affects older buildings without a reinforced-concrete ring beam – a great many inner-city buildings standing on brick strip foundations are of this kind. Buildings with cellars have deeper foundations, which partly protects them from the drying-out of the upper layers, but persistent drought is reaching ever deeper. Large trees planted next to the building are a separate risk: their roots draw the remaining moisture from beneath the walls too. The article on inner-city brick buildings gives a more detailed picture of the characteristics of old brick buildings.
What does the insurer treat as a natural peril – and what not?
In the basic cover of condominium policies, soil-related events are separately named perils. As an example, one Hungarian set of condominium insurance conditions lists earthquake, landslide, rock and earth falls, and the collapse of an unknown structure or unknown cavity among its natural perils, under the basic perils. The common denominator in each case is a sudden, unexpected event acting from outside: Hungarian policy conditions typically define a landslide as a sudden downslope movement of soil layers, and a cavity collapse as the caving-in of a cavity – natural or unknown to the owners – that the building was not aware of. What is typically left out: slow shrinkage or swelling caused by changes in the soil's water content, settlement of the fill beneath the building, design and construction defects, and failure to carry out maintenance – you will typically find these in the definition of the peril or among the general exclusions, and several policy wordings also exclude from cover damage that arises through natural fatigue or wear and tear.
The distinction matters: this is an exclusion, not an exemption of the insurer. The insurer is not saying that the building did something wrong, but that the process that took place is not among the insured events – so what is in dispute is not the building's diligence but the cause of the damage. Exactly how your building's policy is worded can only be seen from its own policy conditions; the limits of the covers for rare, large losses are discussed in the article on special covers. A stand-alone supplementary cover for slow ground movement is not typical of the Hungarian condominium insurance market; if a quote includes one, it is worth asking for its exact content.
Whose crack is it: the building's or the flat's?
In a condominium the question has two sides. Under the deeds of foundation, the foundations, main walls, floor slabs, stairwell and cellar are typically common property, while a flat's interior plaster, paintwork and floor and wall finishes are part of the separate property. If the crack is caused by movement of a common structure – the foundations – then the structural investigation and the strengthening are the community's task and cost, while repairs inside the flat typically remain the owner's; the boundary is drawn building by building by the deed of foundation and the organisational and operational rules (SZMSZ), as the article on the boundary between common and separate property explains. A resident's own home insurance works on the same logic: it typically does not pay for slow subsidence either, so repairing a crack inside a flat is mostly paid out of the owner's own pocket.
One situation is assessed differently: if construction, excavation for an underground car park or dewatering is under way on a neighbouring plot and the cracks appear at the same time, this is not a natural peril but a question of liability – the article on neighbouring construction work shows the route to take. With drought there is no one who caused the damage from whom the building could claim; that is why the situation is more serious, and why it is worth understanding the insurer's response precisely rather than losing time on a dispute.
Reporting, inspection, expert: what should the building do?
A crack does not reveal its cause by itself, so when reporting the claim, documentation is the most the building can do: dated photos, the location, length and width of the crack, and tracking any change with a plaster tell-tale or a crack gauge. The claim must be reported on the insurer's claims line or online platform – the article on reporting a claim describes the process – and the cracks should not be plastered over before the inspection. The insurer's loss adjuster examines the cause: whether a sudden event or a slow process lies behind it.
The building's own interest is independent of this: it should obtain a structural engineer's expert report and, if that warrants it, a soil-mechanics (geotechnical) investigation – with boreholes, soil samples and measurement of the water content. This investigation answers three questions: what the actual cause is, whether the structure is dangerous (whether urgent action is needed), and what intervention is justified. If the expert report identifies a sudden event – for example a previously unknown cavity that has caved in under the cellar, or an embankment slip after a cloudburst – it is worth informing the insurer, because the basis of the assessment is then different. If the insurer stands by its rejection, the complaint must be made to the insurer in writing; a condominium is not a consumer, so the route to the Financial Arbitration Board (PBT) is not open to it, and in a dispute the courts remain.
The general meeting's decision: strengthening, cost, scheduling
If the expert report recommends strengthening the foundations, the decision lies with the general meeting: under the Condominium Act, the co-owners' general meeting decides on the maintenance of the building parts in common ownership and on undertaking expenditure beyond the scope of ordinary management (Tht. Section 28 (1) b)), as a general rule by a simple majority of the co-owners present, counted by ownership share, and by unanimous resolution for undertaking expenditure beyond the scope of ordinary management (Tht. Section 38 (2)–(3)) – within this framework, the deed of foundation and the SZMSZ may contain further rules. The methods mentioned by the experts – resin-injection ground stabilisation and the reinforcement of walls with helical steel bars – and the other possible interventions (strengthening the foundations, sorting out the drainage and the question of the trees) differ in cost and in urgency, so it is worth taking the expert report, at least two quotes and the method of financing (renovation fund, special levy, loan) to the general meeting together.
The renovation also has two insurance consequences. First, the strengthening does not retroactively bring the earlier cracks into cover, but it does improve the building's condition, which is worth backing up with documents the next time quotes are requested. Second, the structural condition and the renovation may be material circumstances for the insurer, so it is worth notifying the insurer in writing when the works start and when they are completed, and thinking through the limits of the existing policy and the question of construction and erection all-risks insurance for the duration of the works.
So what should the common representative do if cracks have appeared in the building after a drought? Document them with dates, report the claim on the insurer's claims line and, in parallel, bring in a structural engineer; read the insurer's response together with the text of the building's own policy conditions, and do not rely on the argument that “this is a natural peril because nature caused it”. If the expert report recommends strengthening, the investigation, the quotes and the financing should go before the general meeting together. If you get in touch with me about the cracks or the insurer's response, I will help where I can.
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Sources
- Nothing like this before: soil drought now threatens homeowners – Infostart, 2 May 2026 (HungaroMet data, structural engineers)
- Colonnade ATLASZ Társasház Biztosítás (condominium insurance) – policy conditions and customer information (230807): II.5 natural perils, basic perils; 12. general exclusions
- Condominium Act (Tht.) Section 28 (1) b), Section 38 (2)–(3) (Act CXXXIII of 2003 on condominiums) – Nemzeti Jogszabálytár (National Legislation Database)
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