Standard conditions of sale - is this normal?

beckstrous

We're trying to buy a property and it is currently vacant, the owner having passed away. We have just got our contract through and the sellers want to make an amendment to the standard conditions of sale that stipulates that the property is at our risk after exchange of contracts but before completion, which means that as soon as contracts are exchanged, we have to take out buildings insurance.

We are not too sure about taking insurance out for something that is not ours. Has anyone else encountered this - is it normal?

mjmal51

Discussed recently
http://forums.moneysavingexpert.com/showthread.html?t=1804017&highlight=insurance+after+exchange

Richard_Webster

Refer to other thread!

Yes, it is very common. The present Standard Conditions alter the rule that always used to apply that the risk passed on exchange of contracts. Lots of solicitors including my own practice routinely change the conditions to go back to the old law.

The new rule is OK if you are a FTB and you could go somewhere else. If the place burns down between exchange and completion under the Standard (unamended) Conditions the buyer may be able to refuse to complete because subject to fair wear and tear the proeprty is not in the same condition as at exchange. If this happens and you are selling as well as buying you will be obliged to complete your sale but the new contract doesn't help you with somewhere to live and you will have a problem with insurance. Your lender's money can only be used by your solicitor if you have insurance and if you have left it to just before completion to arrange it an insurer may decline cover because of the fire!

If you have insured from exchange then your insurer should pay for alternative accommodation and for the rebuilding of the house and your lender should be prepared to still provide the money because your insurers are on the case.

beckstrous

really helpful guys, thanks.