indemnity insurance - why should we (buyer) pay half? help

roastduck

Hi,

advise needed desperately.
we were ready to exchange this morning, but at the last minute, we found out that the vendor has not agreed to pay for the full indemnity insurance for the extension (kitchen) that was built before he moved in in Jan this year.

our solicitor told us that the vendor would only pay half and we would have to folk out the other half of the bill (£150).

can all experts out there please tell me what are my rights? it is the responsibility of the vendor to pay out the indemnity insurance to protect our interests? or when they refuse, the buyers would have to pay? just doesn't make sense nor does it seem fair?

is indemnity insurance a one off payment? would we need to pay again if we sell our house in the future?

i am feeling so upset and angry that our solicitor hasn't acted in our best interest and faught for our rights!

all helps are deeply appreciated!

Robert_Sterling

Until you exchange contracts the deal is always at risk.
You do not have to exchange contracts.
You might want to buy the house and pay half of the £150 fee.
I think it is your call.

CB1979_2

surely for the sake of £75 you may as well just pay it????

I know it main seem a liberty, but as has been said you ain't got nothing yet cos the contracts haven't been exchanged.

if it was me I'd be p*ssed off but to secure the place i'd just pay it, don't want it getting out of hand and the seller decides to think, "well screw them, i'll pull out"

silvercar

if the seller refuses to pay for it, either you pay for it yourself or you decide you don't need it or you don't buy the house!

consider why you need it - no planning permission or no building regs? how long ago was the extension built? what protection will it give you? It may protect you from unlawful extensions but won't protect you from shoddy building work.

any indemnity policy you take can be passed on to future owners.

MegS

The vendor should really stump up the cash as he's the one who wants to sell the property but if he's refusing you have a simple choice - pay half and get the property or don't pay half and take the risk of losing the property. Is it really worth arguing over £75. Also bear in mind that when you sell the property (mainly if in the near future) then your buyers will expect the indemnity policy and you may well end up paying fo the whole thing. Its your call, is it worth losing the property over £75. Oh and yes its a one-off premium.

JennyW_2

MegS wrote:

The vendor should really stump up the cash as he's the one who wants to sell the property but if he's refusing you have a simple choice - pay half and get the property or don't pay half and take the risk of losing the property. Is it really worth arguing over £75. Also bear in mind that when you sell the property (mainly if in the near future) then your buyers will expect the indemnity policy and you may well end up paying fo the whole thing. Its your call, is it worth losing the property over £75. Oh and yes its a one-off premium.

just what I was going to say. This will crop up again when you sell so it depends how bad you want the house. We sold this summer and had to pay out the indemnity insurance for the sake of a smooth transaction. It's not worth losing a property over, especially as you're just about to exchange.

rjm2k1

The policy should be transferrable on sale, so once you have it the issue has been resolved and you shouldn't have anything else to pay if you sellup later.

mrsc_4

If you want the house pay it, at the end of the day it isn't a HUGE amount of money in the grand scheme of things!

Our Vendor has paid for an indemnity insurance but if she hadn't we were happy to pay for it because we really want the house. The indemnity will cover you as well should you sell in the future.

Debt_Free_Chick

roastduck wrote:

can all experts out there please tell me what are my rights?

No "legal" rights as such - down to agreement between you and the seller.

it is the responsibility of the vendor to pay out the indemnity insurance to protect our interests?

Absolutely not. The insurance is optional - it's your choice to have it or not

or when they refuse, the buyers would have to pay?

Again, the insurance is optional. If you don't have it, there's no reason for the seller to have it as they will simply have passed any "problem" on to you (once you complete).

i am feeling so upset and angry that our solicitor hasn't acted in our best interest and faught for our rights!

Perhaps your solicitor is acting on the basis that it's an optional extra.

Generally, those who benefit from an insurance policy are the ones who pay for it. But in this situation, payment of the premium is really a matter for negotiation between buyer & seller.

I assume you are absolutely clear about what the policy will - and will not - provide and that there is a risk of a problem arising?

Woby_Tide

MegS wrote:

The vendor should really stump up the cash as he's the one who wants to sell the property but if he's refusing you have a simple choice - pay half and get the property or don't pay half and take the risk of losing the property.

Why should it be up to the vendor to pay? Do they get any benefit from the indemnity? If you want to protect yourself in any future sales (or with any problems concerning what will be 'your' property) I never understand why it falls on the vendor to provide the indemnity. Should they cover the first years buildings insurance should anything happen to the house? Or a 12 month guarantee?

If people want protection before buying a property then buy the indemnity yourself to cover yourself. Strange the indemnity wasn't an issue when the vendor originally bought it, it's almost as if an indemnity market has sprung up to line some companies pockets based on instilling fear in house buyers.


As an aside, what percentage of people who have taken out indemnities have ever then used them to claim/cover something, it's a bit of a dark art, wouldn't have the foggiest how to go about it if I wanted to?

silvercar

Woby_Tide wrote:

Why should it be up to the vendor to pay? Do they get any benefit from the indemnity? If you want to protect yourself in any future sales (or with any problems concerning what will be 'your' property) I never understand why it falls on the vendor to provide the indemnity.
because it was the vendor that didn't get the proper permissions for the work! or didn't ensure the insurance was in place when they bought

As an aside, what percentage of people who have taken out indemnities have ever then used them to claim/cover something, it's a bit of a dark art, wouldn't have the foggiest how to go about it if I wanted to?

At the price the indemnities are charged, I doubt they cover more than commission for the insurer and commission for the solicitor.

I would guess that most buyers don't know what they are insuring against.