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car crashes through house after exchanging contracs
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The buyer is entitled to have the property transfered at completion in the same condition it was at exchange of contracts.
I know from a friend's experience of exactly the same thing, that it can takes months for the insurers to get their act together and get the work done.
So there is no chance of the property being put back in its original state in time for completion. What happens now depends on whether the buyer is willing to wait for the work to be done. Even then, if the house is not habitable and this means they have to fund more expensive alternative accommodation in the meantime, you/your insurer could also be hit with this bill.
(This sounds like a typical exam/essay question - you are not a law student by any chance?)I'm a retired employment solicitor. Hopefully some of my comments might be useful, but they are only my opinion and not intended as legal advice.0 -
We were told to insure our new house after exchange, and the insurer of our previous house did so for free. Or is it a case of over-insuring to be on the safe side?ivavoucher wrote: »I always thought it was the purchasers responsibility to have insurance from the moment contracts are exchanged.Been away for a while.0 -
Completion was going to be the following day, but just heard it will be after it is repaired, probably at the end of the month now, and after a structural surveyor gives the the thumbs up. Who knows:)
A friend had a car hit his house. It happened in March 2011. It's still not completely fixed in April 2012. It will be considerably longer than a month.Pants0 -
ivavoucher wrote: »I always thought it was the purchasers responsibility to have insurance from the moment contracts are exchanged.
Yes, you are correct! Just been watching "Homes under the Hammer" - Martin viewed a property which was broken into AFTER exchange, and stated that the buyers insurance must take effect from point of exchange, so the new owners are responsible for the damage! You can catch the programme on BBCiPlayer after 11.00am today if you want to check it - its the 3rd property they visit, about 35 minutes through the programme.
So OP, get your solicitor onto it and pass to the buyers!0 -
If the house has to be handed over in the same condition it was in at exchange, why do mortgage companies insist on buyers having buildings insurance in place from exchange?
We were told it was because if the house burnt down between exchange and completion, we would still be legally bound to buy it at the agreed price. We therefore had to insure it in case anything happened...Insuring the property
You should make sure that buildings insurance is arranged from the date of exchange, because once contracts have been exchanged you are responsible for the property.
http://www.adviceguide.org.uk/england/housing_e/housing_moving_and_improving_your_home_e/buying_a_home.htm#Steps_in_the_legal_work_of_buying_a_prop0 -
By a fantastic coincidence this was just mentioned on Homes Under the Hammer on BBC1 in the last few seconds. The presenter said it was the responsibility of the purchaser to insure the house from the moment of exchange. This, of course, should not be taken as binding legal advice.Been away for a while.0
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OP - whether genuine or an exam question, here's a source for you:
http://www.shlegal.com/knowledge/publications/06_10_The_perils_of_double_insurance_in_a_property_transactionThe case confirmed that there is no legal requirement for the seller to insure a property between exchange and completion. Common law provides that the risk in a property passes to the buyer on exchange of contracts unless the contract provides otherwise.
This means that the buyer is required to complete the purchase of the property notwithstanding it has been damaged or destroyed prior to the completion date.
@zzzLazyDaisy - Or an ACII student?
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Under the standard conditions of sale, if something happens to a residential property between exchange and completion, to make it unusable, then the buyer is entitled to recind the contract (ie refuse to complete).
If the property is not in the same condition at completion as it was at exchange, but the damage does not make it uninhabitable (lets say the seller took some fitted kitchen units that were part of the fixtures and fittings and therefore part of the property) then the buyer must complete but can pursue the seller for breach of contract.
So it is important for the buyer to insure at exchange, as although they don't actually own the property until completion, they are legally bound to complete even if there is some damage to the property between exchange and completion (eg a flood or a break-in) causing damage but not going so far as to remder the property unusable.
Lenders will insist on the buyer taking out insurance to protect their investment, as damage will often not be discovered until after completion and the buyer moves in - and regardless of whatever rights the buyer may have against the seller, the lender will want to ensure that its security is protected.I'm a retired employment solicitor. Hopefully some of my comments might be useful, but they are only my opinion and not intended as legal advice.0 -
Under the standard conditions of sale, if something happens to a residential property between exchange and completion, to make it unusable, then the buyer is entitled to recind the contract (ie refuse to complete).
Only if the contract follows the 4th edition of the Standard Conditions of Sale without amendment - the 5th Edition would oblige the buyer to complete as it essentially reverts to the Common Law position where it is the buyer's risk from exchange.
All this stuff about who is insured is interesting but the essential point is firs to establish liability under the contract and that depends on which version was being used.RICHARD WEBSTER
As a retired conveyancing solicitor I believe the information given in the post to be useful assuming any properties concerned are in England/Wales but I accept no liability for it.0 -
And if it was the buyer in the car...:eek:Stop! Think. Read the small print. Trust nothing and assume that it is your responsibility. That way it rarely goes wrong.
Actively hunting down the person who invented the imaginary tenure, "share freehold"; if you can show me one I will produce my daughter's unicorn0
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