First Time Buyer..Almost In

Typhoon2000

Yes I am sure thats right, you cant remove or change things that are in the contract after exchange but before completion.
The same contract also describes the house and if the house is not there (fallen down, knocked down/ gutted by fire etc) after exchange then surely the contract become null and void. And the buyer does not have to worry about insurance to rebuild the thing and the mortgage company refusing to lend. Surley it is the vendor that will have to make use of his insurance to put things right for the buyer before completion can go ahead.

GMS

Typhoon2000 wrote: »

Yes I am sure thats right, you cant remove or change things that are in the contract after exchange but before completion.
The same contract also describes the house and if the house is not there (fallen down, knocked down/ gutted by fire etc) after exchange then surely the contract become null and void. And the buyer does not have to worry about insurance to rebuild the thing and the mortgage company refusing to lend. Surley it is the vendor that will have to make use of his insurance to put things right for the buyer before completion can go ahead.

I am not sure on this. Bit of a grey area. Once exchange has happened then there is a commitment to buy. Technically the vendor could cancel their insurance as the propert is the responsibility of the purchaser I think. Happy to be shot down on this.

If vendor and purchaser bith had insurance in place then there would be an argument from each insurer as to who was responsible. The stance would surely be 'Exchange has taken place, purchaser's responsibility'.

I really don't know for sure. Somebody will give the answer.

LittleMissAspie

Our solicitor told us we didn't need insurance until completion.

There is a clause in the standard terms of sale that says:
"The seller will transfer the property in the same physical state as it was at the date of the contract (except for fair wear and tear), which means that the seller retains the risk until completion.

If at any time before completion the physical state of the property makes it unusable for its purpose at the date of the contract:
a) the buyer may rescind the contract
b) the seller may rescind the contract where the property has become unusable for that purpose as a result of damage against which the seller could not reasonably have insured, or which is it not legally possible for the seller to make good."

My bolding. So if the house falls down, you can back out of the contract.

Our seller's solicitors crossed that clause out, our solicitor added it back in and said he wouldn't let us exchange without it

tomatopuree

LittleMissAspie wrote: »

Our solicitor told us we didn't need insurance until completion.

There is a clause in the standard terms of sale that says:
"The seller will transfer the property in the same physical state as it was at the date of the contract (except for fair wear and tear), which means that the seller retains the risk until completion.

If at any time before completion the physical state of the property makes it unusable for its purpose at the date of the contract:
a) the buyer may rescind the contract
b) the seller may rescind the contract where the property has become unusable for that purpose as a result of damage against which the seller could not reasonably have insured, or which is it not legally possible for the seller to make good."

My bolding. So if the house falls down, you can back out of the contract.

Our seller's solicitors crossed that clause out, our solicitor added it back in and said he wouldn't let us exchange without it

Most contracts would modify that to put the onus on the purchaser to insure from exchange. I was told by a colleague of a property that burnt down a day or two before completion (about a week after exchange). For some reason the insurance appeared to be in place from the solicitors point of view, but actually wasn't. The buyer was contractually obliged to buy the property. The lender would not send monies through for completion. The seller could not complete without the mortgage monies and had to forfeit the 10% deposit.