Legal liabilities on a repossessed property I'm purchasing

MarktheHarp

Hi all,

Still looking at a repossessed property to buy (see separate thread from me about financing it).

I discovered during my extensive research that there was an insurance claim for £23k for leakage in the roof by the previous owner. The insurance claim was paid direct to the owner and he went on holiday with the money, so nothing was ever repaired and damage continued to be done to the property.

2 questions really:

1) Am I going to inherit any liability - ie can the insurers turn up and insist that I do the work they paid the previous owner for? and...

2) looking at the flip side, do I have any claim against the owner / insurer who took these funds and didn't do the repairs - or in the case of the insurer, who didn't check that the work was done? I don't know the insurer but I do know about this because the builder who is going to do the roof work for us visited the property to provide a quote for those insurers. Don't know how long ago that was but I guess about a year ago.

The second point might be valid as if we purchase we are going to have to replace the whole roof. Water has got in and caused a fair amount of deterioration to the three floors of this large (12 bed) property. This work will be £80-£120k

Any thoughts?

david29dpo

1, No 2, No You buy as seen. Just make sure the price you pay for the house takes into account of all the work needed.

MarktheHarp

Thank you! Since writing my original comment, I've now got hold of the quote which was given to the insurers in February 2008. So we now know that the damage is exactly as the damage is now, but with obviously extra work required because of the intervening 18 months or so. So we will include that info to underline our basis for reducing our offer.

Am I right in thinking that the price set of a repossession is usually 70% of market value? I'm hoping it is because we know the price paid by the owner before he defaulted, and we know that the current price of the property is about correct on that basis. We can now make an offer minus an amount for the damage which wasn't repaired.

It goes without saying that if they don't accept that, we walk away.

david29dpo

No. The price of a repro is the same as any other house, i.e. what the market will bear. What the present owner paid for it is irrelevant. Simply offer what your think its worth to you as it is.

Richard_Webster

I discovered during my extensive research that there was an insurance claim for £23k for leakage in the roof by the previous owner. The insurance claim was paid direct to the owner and he went on holiday with the money

Stupid insurance company! They should only have paid when they were satisifed the work had been done!