Condition on which you can pull out between exchange and completion

chickmug

In a very long time in the business almost 40 years and having been respnsible for many thousands of sales I have never seen anywhere become unfit. I have only seen a couple of sales that exchanged and never completed.

So worry about something else and not this.

BrummyBen

We're exchanging today (with a nil-deposit but thats another story!) & completing next Thursday. Am I right to think that we need to get buildings insurance for our new property & continue with the contents on our current house?! And does that mean we can cacel the buildings cover on our current house, as presumably our buyer will be insuring it?!

As you can tell I'm a little confused!

Thanks in advance

1st time mover!

Fire_Fox

Your buyer should insure your house, but I wouldn't risk that they may not. If the house burns down and neither party has buildings cover ... you will have a long fight on your hands to either force them to complete or achieve compensation for breach of contract. The buyer may go bankrupt in the process: there's a lot of ifs and maybes but for the sake of a tenner it's not worth the risk IMHO.

Fire_Fox

gingermingerr wrote: »

T
But once you've EXCHANGED there is no going back. You just lose your deposit if you back out of the contract.

You can potentially lose a lot more than just your deposit: there are increasing numbers of cases of developers sueing buyers who exchanged on an off-plan and then can't raise the finance in a falling market. The developers are claiming for ALL their costs, which means the difference between the agreed price and the price they sell to a new buyer, often tens of thousands on top of the deposit.

G_M

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. ... This is fine but I don't know how we would prove that something had changed between exchange and completion!!

That's a really interesting point.
In the case of rented property, where the sums involved are really much smaller, there is an established and accepted process- the inventory. Which these days usually includes photographic records.
In house sales, there is no equivalent.

But should be.

chappers

I would discuss with both your vendor and buyer as to who is going to cover each property, (it's usually the buyer)just so there is no confusion.
You cannot have one property insured twice, this will create it's own legal wrangling in the event of a claim, with both insurers trying to duck out of the claim.
There are virtually no situations where one party could pull out without being in breach of contract other than by mutual consent and then you would be in breach of contract with your buyer assuming you are in a chain.

maninthestreet

Apparently, if you die between exchange and completion, you can pull out of the sale.

silvercar

maninthestreet wrote: »

Apparently, if you die between exchange and completion, you can pull out of the sale.

Being dead, I suspect it would be difficult to pull out of anything.

brixham

maninthestreet wrote: »

Apparently, if you die between exchange and completion, you can pull out of the sale.

But would the heirs still have to continue with sale ?

not_loaded

The property should remain 100% in the condition it was in at the point of exchange. Burnt to the ground is one possibility. Backing a removals lorry into the eaves is another. The vendor must cover any damage via insurance or otherwise, as you haven’t completed.

Whilst filing the paperwork from my solicitor I found the following:

Damage to the Property Between Exchange of Contracts and Completion
The seller remains liable for the property until completion and should keep it insured. At completion the seller must transfer the property in the same physical state as it was at the date of the Exchange of Contracts (except for wear and tear).
A buyer can withdraw if at any time before completion the property is no longer usable in the same way that it was at the time the contract was made.

Logically the buyer can then claim against the seller for losses due to the failure to complete.