Damage after Exchange

kathyd_2

I think so too. My next door neighbours moved recently and on the very day of the move the boiler packed in. They contacted an emergency plumber and all was well by the end of the day, at their expense of course. Aaah! How nice were they?

Dan29

desperadoV2 wrote:

What happens if the whole house is on fire on exchange date? what then?

I'd think twice about exchanging on it if I were the buyer

If however you mean what happens if there's a fire AFTER exchange, you still have to complete on the agreed date. That's why you take out buildings insurance from the day you exchange contracts, not the day you complete/move in.

dfarry

Dan29 wrote:

I'd think twice about exchanging on it if I were the buyer

If however you mean what happens if there's a fire AFTER exchange, you still have to complete on the agreed date. That's why you take out buildings insurance from the day you exchange contracts, not the day you complete/move in.

You do?

Forgive my ignorance but i can't see how a insurance company would want to be liable on a property that you did not own and should, by rights be insured with another company.

I would have thought if something catastrophic happened after exchange, the current owner would be liable for the costs and if completion was not possible because of that then it's a case of breach of contract. However as mentioned before the burden of proof would be on you if you only found out after completion

Dan29

dfarry wrote:

You do?

Forgive my ignorance but i can't see how a insurance company would want to be liable on a property that you did not own and should, by rights be insured with another company.

I would have thought if something catastrophic happened after exchange, the current owner would be liable for the costs and if completion was not possible because of that then it's a case of breach of contract. However as mentioned before the burden of proof would be on you if you only found out after completion

Yes, you do. Completion would still be possible, even if the house had burnt down. Moving in, however, would not

Doozergirl

dfarry wrote:

You do?

Forgive my ignorance but i can't see how a insurance company would want to be liable on a property that you did not own and should, by rights be insured with another company.

You've paid a 10% deposit on exchange and have committed to buying the property outright. You and your mortgage company therefore have quite a large insurable interest.

dfarry

Yeah true... I keep forgetting that as my deposit is coming up through the chain.

Altarf

dfarry wrote:

Yeah true... I keep forgetting that as my deposit is coming up through the chain.

It's not the deposit that is the insurable interest, it is the commitment to buy. So if the house burns down between exchange and completion, you still have to buy it.

As for the damage to the property, the seller is obliged to keep the property in the same condition it was when contracts were exchanged. So if there is property damage between then and completion they are liable.

silvercar

Altarf wrote:

As for the damage to the property, the seller is obliged to keep the property in the same condition it was when contracts were exchanged. So if there is property damage between then and completion they are liable.

Not sure on this, if it is true why should the buyer take out buildings insurance from exchange?

I think it may be true in Scotland but not E&W.

barnaby-bear

Altarf wrote:

It's not the deposit that is the insurable interest, it is the commitment to buy. So if the house burns down between exchange and completion, you still have to buy it.

As for the damage to the property, the seller is obliged to keep the property in the same condition it was when contracts were exchanged. So if there is property damage between then and completion they are liable.

Our solicitor said this that contract obliged house to be in same condition as exchange. He siad insurance was worthless as you can't insure a property and show due care required if someone else living there, i.e. if they set fire to it with a fag carelessly dropped and the smoke alarm has no batteries - you can't have taken steps to prevent it or take due care.

silvercar

our solicitor told us to insure the minute we had exchanged.

you never actually know the condition when you exchange, only the condition when you lasted viewed the property.