Sold property and roof caved in, HELP URGENT!!!

BargainJunky

When my mom bought her house we were told by the solicitor to get insurance in place on exchange of contracts not completion. (She was a cash buyer).

I would have thought that it should be passed onto both your mums insurance company and his to thrash out the problem between them.

Did this man do an inspection prior to exchange as my mom was advised to do this by her solicitor. We inspected on the Tuesday but to be truthful anything could have happened to the property prior to completing on the Friday and then I guess we too would have had a problem proving when it actually happened.

Good luck.

peterbaker

Have we a lawyer in the house? (I AM NOT)

This is long and I have tried to summarise at the end for those who want to jump there: ...

I am not a lawyer but although this is messy, I think it boils down to a relatively straightforward situation, although my unqualified opinion is that the news isn't good for braken2000. I have to assume we are in England or Wales - I havent a clue what goes elsewhere.

GG has made some lawyer-like firm comments but I only agree with some of them. I will even be so bold to say I feel sure GG is not a lawyer because he said "If the house is yours, he cannot claim from his insurance." That's not strictly true. Both the seller AND the buyer have an insurable interest in the house between exchange of contracts and completion. Many standard buildings insurances used to give the buyer some automatic protection under the seller's policy (subject to seller's authorisation at claim time). I am pretty confident when I say I think all lawyers know that both parties can have a simultaneous interest for this period which is why I have my doubts about some of the comments? Conveyancing lawyers certainly used to have it as one of their "MUST DO" (Check insurance) items before exchange in order to avoid criticism in case damage occurred and the seller had no insurance and the buyer might not have either. Many of them had special "block policies" with tame insurers for this purpose. Sorry to be blunt George, but we need clarity on this one , don't we? Silvercar too ... firm points with fair general comment (caveat emptor and stuff, but it isn't quite as simple as that IMHO)

So Ownership changes when?
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AFAIK, in England and Wales at least, Exchange of Contracts is NOT the point at which ownership changes. AFAIK it is the point at which Offer and Acceptance are formally agreed, and in English law a Contract to proceed to Sell and Buy is made subject to usually standard conditions about a deposit and timescales, payment and a few other things. In these heady days of busted Christmas delivery contracts, exchange of contracts is a kind of preorder with real consequences if you like! (preorder:D - now there's an overused contrivance of a word if ever there was one!)

The Law in Scotland may be different so if it applies then I have no idea how it might be different. Not sure about Northern Ireland either.

Back to the house (in England or Wales I presume):
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I spent many years in insurance and studied it hard too. I know that the buyer is not obliged to insure the property at exchange of contracts but as a backstop he would always be recommended by his lawyer to do so because if he has made up his mind he wants the property to the extent he has risked his deposit in the venture, then far worse things than collapsed flat roofs can occur to buildings which might mean a behind the scenes insurance settlement would be the best way to handle it if it happened BUT, that does not mean the buyer MUST use any insurance he or his lawyer arranged as a backstop.

Insurance:
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Anyway, I am now going to throw a MAJOR SPANNER IN THE INSURANCE WORKS: Quite probably, neither insurance company would pay to replace the flat roof because they are notorious "wear and tear" (for want of better words) parts of even modern houses. They are known only to last for a relatively short period. This house is quite likely already to have had the roof replaced more than once or twice in its lifetime, maybe as many as 7 times already if it is particularly exposed to very bad weather every year.

Because it is an old roof, unless retro-weather reports for the day show that there was good likelihood of a "SEVERE" storm on the day the roof "blew off" or "SAVAGE DOWNPOUR" or "TORNADO IN THE SAME STREET" ( ), the only part of the damage that might be paid by any insurance is damage to ceilings and decorations as a consequence of the roof collapsing i.e. the ensuing damage. When we fixed my mother-in-law's roof that's exactly what happened and that was with me working for the insurance company that insured it! I was extremely good at getting generous claims settlements for my clients and it was a very very good company in its day, but that's the best I got! So take it from me, neither buyer nor seller are likely to do better!

If the insurance company get wind that the roof has been leaking for sometime causing a gradual deterioration of the ceilings and decorations they will most likely NOT PAY FOR ANYTHING! They'll want a date of the collapse. Then if you argue STORM they will check the retro-weather reports very carefully.

The survey:
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The survey is between the buyer and the surveyor or the buyer's lender and the surveyor. Apart from as already suggested, using it as evidence that the buyer's agent or the lender's agent may have discussed any existing damage, it is none of the seller's concern what the surveyor actually reported, especially in relation to "new" damage events which the surveyor did not see even if he could have partially predicted them, which occur before completion and which no-one except the seller has seen.

Disclosure:
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I know the government has plans to tighten up on this and "it hasn't happened yet" but this government is notorious for introducing new laws which in many cases cover things which are common law already -and often they succeed in confusing the whole bloody thing! Anyway, ...

It is obvious (right?) that unless you are selling a house as uninhabitable pending unspecified repairs and no-one is living in it, that your buyer expects it to be handed over in an habitable and substantially unchanged and undamaged state from when he or his agent last saw it. Otherwise you are tricking the seller by not disclosing something that would have obviously affected his decision to complete. Sorry to use the word "tricking" but it is best to try to see the possibilities from both sides.

The seller's lawyer will always ask the seller to complete a written declaration form of defects that the seller knows about (usually prompted by the buyer's lawyer after he has had a chance to look at any survey, plans and searches) and this will be passed back to the buyer's lawyer so he can be made aware of anything obvious and make sure his buyer client knows about it so it can be renegotiated, and I accept this might all normally be done prior to exchange, but sometimes I think exchange will be done subject to one or two identified loose ends being sorted satisfactorily in normal course.

After exchange, it is plainly obvious that the buyer relies on the seller's honesty to a large extent to keep the house in substantially the same condition as he last saw it. We don't need any special laws to tell us that, do we? It's common decency if you expect someone else to move in without special work, just like leaving light fittings rather than leaving the house in the dark, and like running the hoover round to avoid leaving the dust that never got hoovered before until the bed was moved out! These are good citizen things.

I fully accept a buyer could choose to argue this roof as a grey area as there are lots of obstructive arguments to throw in the path of an obviously upset seller, but it is hardly reasonable to do so is it, IF the seller has "tricked" him and his lawyer into paying over all the completion monies that very day without telling him "BTW that dodgy flat roof" has collapsed? (Sorry about that word again but I guess I am playing devil's advocate...no offence intended...I really feel sorry for your mother braken2000 but sorry don't pay the bill...)

Now the drains:
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If the seller did not know about the problem before completion, then because it is a hidden item which may have had no obvious effects then it could be arguable either way. Again it is an item unlikely to be covered by insurance (if you have insurance do look, but chances are extremely slim based on that horrible "wear & tear" or "gradual deterioration" small print again). If the EXTREMELY HEAVY removal lorry ran over it on the way out then maybe (:D) ....
If the buyer was told by the seller at anytime before completion and the buyer formally accepted then there is no argument.

The seller might feel that he noticed it so quickly when he moved in that the buyer deliberately failed to disclose problems with drains on the declaration forms I spoke of earlier. There are always questions about problems with drains.

It is a bit unclear from the information given, whether completion has occurred or if indeed what is going on here is a completely normal contract.

My views as I say, are not as a lawyer but as someone who used to know a bit about the insurance angles, has bought six houses and who helped fix mother-in-law's collapsed flat roof with his brothers-in-law on a couple of winter's days 15 years ago .... Brrrrr!

If the house is otherwise habitable, let's face it, the flat roof replacement is probably not a huge deal but it would be if the seller slaps you with a commercial builders bill for all of it! Those rooves have to be checked and often replaced as little as every 10 years or so in particularly exposed locations. 20 years without a leak would be quite unusual.

It was bad luck it didn't last another few days if it really did fail in a day. When it was in the buyers control the costs could have been managed. Now, with an upset seller, you almost certainly WILL get a hefty bill for it from a lawyer including the dreaded lawyers costs unless you can back-pedal and negotiate something quickly directly with the seller.

(I think)

So my summary (pending REAL legal advice!!!):
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1. Even if there was insurance (either side) chances are they almost certainly wouldn't pay to fix the roof and probably not even the ceilings and decor unless it really did all fail in a day. Very sorry, but I think you might have to assume NO-ONE can claim insurance on this one even if there were policies in force.
2. Can't blame the surveyor
3. Can't blame either side's lawyers (unless one or both lawyers knew of leaking roof and/or collapse and didn't disclose the problem - unlikely).
4. Can't really blame buyer for being upset if the first he knew of leaks/collapse was after he'd paid all his money.
5. Can well sympathise with seller's predicament with unforeseen costs on roof which if only had lasted a few more days .... but that's life ... prepare to back-pedal and negotiate nicely, or for it to get very expensive very quickly.
6. Buyer can't really blame seller for drains unless it was obvious drains had been backing up or smelling or whatever and seller had failed to disclose, but if you let 5. get out of control now you may end up paying both roof and drains because legal costs are spiralling out of control and you won't have enough money to defend it against a fart-man so better think about being nice again. The poor man did get his dog run-over and it might well have been partly because he was distracted by the surprises left for him on the day...
7. Unless you are richer than he, only when it is over and he is out of earshot can you afford the luxury of calling him names under your breath!

Your mother's lawyer might already know about this because I doubt that every last piece of paperwork between the lawyers actually does get transacted on completion day - only the essentials (honour among thieves and all that!). So what does your mother's lawyer say? Should be able to get at least an initial verbal piece of advice without paying for it! See if we can get some quick REAL legal advice here first...

I might be being overly pessimistic but I don't think so....


Is there a friendly lawyer in the house?? Quickly please!

courtjester

peterbaker - absolutely spot on, I even read right to the end :T

You're right about the insurance aspect - there is no point in referring to insurers unless there is CLEAR and indisputable evidence of extremely high winds which damaged buildings in the location on the relevant day and literally blew the roof off.

Rain or heavy rain is NOT storm damage as far as insurance policies are concerned. A roof is designed to keep the rain out. If it fails to do so, then it is (normally) because the roof needs maintenance.

When a flat roof fails, the felt bitumen membrane becomes brittle (with age) resulting in fine cracks, seals between joint lines coming unstuck and the material becomes porous (it 'perishes'), essentially due to the effects of sunlight over time. Stone chippings are there to protect the roof from the ageing effects of the sun, but these tend to disappear or thin out over time further reducing the life expectancy of the roof material.

In virtually 100% of cases, the failure of a flat roof is due to it reaching the end of it's (limited) life, not due to storm damage and (other than the possibility that insurers may deal with internal water damage to decorations etc resulting) insurers will NOT pay for replacement - it is the building owner's responsibility to maintain the structure.

HugoSP

I can't argue with any of the points above but if we're only talking about a flat roof then the good news is that it should be relitively cheap to fix.

What square footage are we talking here?

Assuming its the size of a garage we are talking around £1k for the new surface and probably around £500 for the replacement marine ply underneath, depending on the state of the rest of the roof around it. This is assuming the joists are OK.

If the joists also need replacing I would add a further £500 to £800 to the cost.

Subject to getting in estimates etc My guess is that if they went for a 50 50 split on the roof then each party would be out of pocket by £1k.

As for the drains. IMO he really hasn't got a prayer if his surveyor picked it up. He knew what he was dealing with on that basis when he bought the house.

Assuming my estimates are not wildly innacurate my take on this would be to make a without prejudice offer of 25% (£500?) as a gesture of good will on the basis that he will have a new roof out of the deal as opposed to one that is several years old regardless of condition. Drains are not as expensive as some people may think to sort out. Repairs can ofted be carried out without excavating them.

But do nothing until you hear further on the matter

On reflection he may consider it a wise move to take the money and run, or he may try and negotiate. Putting myself in his shoes I suspect I would consider negotiation and maybe try to get a few more quid out of the deal. However if the vendor simply didn't have the money to pay more then the words 'dead horse' and 'flogging' come to mind.

The important thing here is to try and see it from the buyers point of view. He may not be in the right but he obviously thinks he is. One has to hope his his solicitor will be able to advise him to the best of his interests.

One aspect that may play a part is whether or not this chap is an investor or has just bought this for himself. If he knows his property and makes a living investing, then a court could err on the fact that he probably paid the price that its condition reflected and he has just suffered bad luck.

To take it to the extreme if a property sold for £100,000 whereas its good condition value is £150,000 and this problem occurred then a common sense view would be that it was cheap for a good reason.

Ian_W

Peterbaker - so good I thanked you twice!! :T

I'm surprised at so many obviously experienced housebuyers saying - on exchange of contracts the house is yours. Not true in England & Wales [though the OP resides in Carlisle which is close to Scotland, so if the house is North of the Border this may not apply] if a lawyers explanation to me of why to insure from exchange is correct.

Being a moneysaver [or tight git!:D ] even before MSE I queried this a few years ago. The explanation was - No the house isn't yours until completion but you have committed to buy it on a certain date at a certain price. If something drastic happens between exchange and completion it is the sellers responsibility to put it right BUT if they're not insured, or can't be traced or don't have the money - at least you're covered for fires, floods, storms vandalism etc. It's a belt and braces approach which is good practice and even a requirement of some lenders.

With regard to the OP I think it's a question of fact, did the roof fall down before completion or afterwards. If it's the former [on balance of probabilities] I think mum is liable. If it's the latter then caveat emptor and the comments on surveys come into play AFAICS.

I think it is a job for your lawyer and Hugo's pragmatic approach is quite likely to be the one the brief takes I would think - if the factual question of "when" is unclear.

As regards the drain though, I don't think the buyer has a prayer.

Woby_Tide

I think until teh OP actually clarifies whether it had exchanged or completed and what was actually happening you haven't a hope in hell of making a decision. Sounds very confusing, Why would someone be handing over keys on exchange? Likewise what was the agreement for moving out on completion?

silvercar

Ian_W wrote:

Being a moneysaver [or tight git!:D ] even before MSE I queried this a few years ago. The explanation was - No the house isn't yours until completion but you have committed to buy it on a certain date at a certain price. If something drastic happens between exchange and completion it is the sellers responsibility to put it right BUT if they're not insured, or can't be traced or don't have the money - at least you're covered for fires, floods, storms vandalism etc. It's a belt and braces approach which is good practice and even a requirement of some lenders.

My solicitor told me the exact opposite; once you have exchanged contracts you are obliged to complete even if it totally burnt down and you were completing on a pile of dust. This is why you have to have insurance from exchange. You have committed to buy on a certain date at a certain price whatever the condition.

peterbaker

I am sorry I made so many typos last night. I hope I didn't confuse anyone too much.

I really do think it would have been nice if a lawyer had commented by now. These things are best nipped in the bud by civilised negotiation (based on facts and law) by the parties themselves.

I hate the idea that lawyers have read this and are just sitting back thinking "well there's another one that'll have to come to us soon or later".

I have had one or two litigious dust ups in my 50 years (that I have started as opposed to responded to, except the divorce!) but have managed to get a fair result on all of them without letting any lawyer control the show. I've only gone to them in the final stages to help me dot the i's and cross the t's and to make sure I haven't forgotten something. Saves on grey hairs and on wallet!

Reading between the lines again, I think we are definitely dealing with a completion.

However, I am quite sure silvercar's reassertion

silvercar wrote:

My solicitor told me the exact opposite; once you have exchanged contracts you are obliged to complete even if it totally burnt down and you were completing on a pile of dust. This is why you have to have insurance from exchange. You have committed to buy on a certain date at a certain price whatever the condition.

is misleading. I can understand how a lawyer might have used some of the words in it as fair warning, and I wouldn't be surprised if THERE IS still some legal compunction to complete but I don't think we can infer from it (if there is compunction to complete on a pile of dust) that the seller is absolved from responsibility for rectifying the damage.

Thankfully the laws of England have not yet been messed up completely by TB and Cherie so I think we can all still expect that the right answer makes common sense.

I mean it is surely no more right to expect a buyer to accept an unexpectedly damaged house he's just arrived to move into than it is for him to accept an unexpectedly damaged car he's just arrived to pick up, or even to expect a landlord to forgive the deliberate trashing of a flat by a tenant on the day he moves out (I reckon!).

So then, let's have some better informed view on the law now please...this is not an airliner disaster with investigators still hunting for the black box...it's just an everyday kind of flat roof problem! Question is simply "Who's responsibility is it, and if IT IS NOT the seller, then please may we know why?":D

tpurch

Hi Braken,

I am really sorry to here about your troubles! I don't really have anything to add regarding the legal position but ..... (and I hope you don't take affence to this...) I think you maybe being a bit hard on the new owner.

I don't know all the details of this, but if I purchased a house and then the roof had caved in, I would be really, really !!!!ed and very suspicious that the previous owner knew that something was wrong when they sold it. (I am not saying this is whats happend but there are some people who would sell a house knowing that the roof was knacked, but cover it up to get the sale)


So, I know it may seem unreasonable to you but, I wouldn't blame him because I am sure from his point of view he has been "sold a lemon".

Just sit back and think, what if it happened to you? would you accept that you made a mistake by not taking up insurance or having a full survey, or would you tend to believe that you have been stitched up by the seller?

When you buy a house, don't you expect to receive it in the condition that it was when you viewed it (I know I do) and to be honest I wouldn't expect the roof to cave-in the first time we had heavy rain or even within 6months of it!

Yes, he should have had a full survey, but many people don't because of cost and you would think that(rightly or wrongly) an valuation would take account of major concerns such as the roof etc.


Sorry, if I sound like I am defending him (but I guess I am), but not because I don't believe you or feel for you, its that I feel sorry for everyone involved!!!!

I am really sorry that its causing you & your mum stress and I hope everything works out OK!

prudryden

The buyer will have been instructed by his solicitor to get building insurance from the day of the exchange of contracts. He can still back out before completion but will lose his deposit. It is totally irresponsible of the buyer not to have a building survey done on an older house if nothing more than to check for damp, dry rot, woodworm etc.
Keys would have been exchanged on the day of completion. That is why I am confused as to why the OP was still in the house.
A flat roof suffering from deterioration of the felt should have shown signs of damp entering the property for an extended period of time and would have been picked up by a proper survey - even a basic one unless it was only an evaluation.
Whether the roof collapsed because of improper maintenance or because of an unusually heavy rain still remains to be seen.