Condition on which you can pull out between exchange and completion

purplebuzz

Hi,

I am hoping that someone can clarify something which I have just been told by my solicitor.

We are in the process of selling our house / buying another, and been in to sign our contracts ready to exchange soon.

Regarding our sale, we have been told that if between exchange and condition the property becomes "unfit", the buyer has the option whether to proceed with the purchase or not. They can if they wish pull out with no conseqence to themselves, thus leaving the onward purchase impossible and having to default on that contract.

I know that this is highly unlikely to happen, but just wanted to know if any other vendors have had this explained to them before?

m1ntie

Why would it become "unfit"?

ILW

Burn down?

Doozergirl

It's not that simple as far as I'm aware. If the place burns down then the buyer could end up in a legal wrangle as they've commited to buy the property. I can't imagine it being simply that easy to walk away. "Unfit" is a very vague phrase and you certainly couldn't pull out if it wasn't as great as you'd remembered.

purplebuzz

m1ntie wrote: »

Why would it become "unfit"?

ILW wrote: »

Burn down?

Yeah this is exactly one example and that which the solicitors used.

purplebuzz

Doozergirl wrote: »

It's not that simple as far as I'm aware. If the place burns down then the buyer could end up in a legal wrangle as they've commited to buy the property. I can't imagine it being simply that easy to walk away. "Unfit" is a very vague phrase and you certainly couldn't pull out if it wasn't as great as you'd remembered.

Perhaps the solicitor is just trying to put it into layman's terms to make us understand, but it seems that a buyer would be able to get out of the contract for this "unfit" reason. She said that on the 2 occasions that something major has happened to the property between exhange and completion, but buyers still went ahead with the purchase.

Solicitor has also mentioned that the seller has to ensure that the property has to be provided in the same state on completion as it was in exchange, subject to fair wear and tear. (So has advised us to go and view our onward purchase again as close possible to exchange to ensure condition is satisfactory) - This is fine but I don't know how we would prove that something had changed between exchange and completion!!

poppysarah

When do you insure the property you're buying?
From exchange?

purplebuzz

poppysarah wrote: »

When do you insure the property you're buying?
From exchange?

That's what I have always been told, and what I have always/will do. However, under the scenario above, any claim made on the "unfit" property, our solicitor says, would have to be made by the vendor!

She advises covering both properties (selling and buying) during the time between exchange and completion to potentially cover every eventuality.

Gwhiz

You ALWAYS insure at exchange so that IF the property burns down YOU have insurance and can get the house rebuilt. I have sold and purchased too many houses over the years to mention - what your solicitor is talking about is new to me!

Richard_Webster

This is why a buyer should insure from exchange. It is all very well being able to get out of a purchase because the place has burnt down but where will you live in the meantime if you are committed to selling your existing property?

purplebuzz

Richard_Webster wrote: »

This is why a buyer should insure from exchange. It is all very well being able to get out of a purchase because the place has burnt down but where will you live in the meantime if you are committed to selling your existing property?

So, what I have described originally is true then. Where would that leave up with our onward purchase then, if our buyer's pulled out due to the property we are selling suddenly becoming "unfit"?