Woolwich mortgage- buildings insurance necessary??

moon_river

Sorry if this question is on the wrong board, wasn't sure if I should post it here or on the house buying one.

Basically can someone shed some light on the matter? Everything (literally) is in place to exchange contract, the only niggle is that the vendor hasn't been keen to get the building insurance and thus, our solicitor is not able to proceed with the exchange.

Some very quick information about the property (1 out of 4 flats, the vendor owns 2, leasehold, share of freehold).

I am at my wit's end, this has gone on for 24 weeks now, it doesn't even have a chain. We even offered cash for the vendor to get the building insurance as our solicitor told us that we cannot insure the parts that we don't own (the other 2 flats).

This sounds about right, but I just wonder if building insurance is an absolute requirement to secure mortgage from Woolwich? Is there a way around this at all...?

Thanks in advance.

kingstreet

Buildings insurance from exchange of contracts is essential regardless of the lender concerned.

If the property you are purchasing is leasehold, the freeholder would be expected to insure the building, leaving the leaseholder to insure their belongings.

Goldiegirl

It is more than likely a condition of the mortgage that there is building insurance in place

It is essential - as soon as contracts are exchanged you are responsible for the property.

Not having adequate buildings insurance is a huge risk, and a risk that the lender would find unacceptable.

As it's a leasehold flat, I assume there is a management company? Normally the management company would arrange the buildings insurance

moon_river

Thanks for the prompt replies. The building is currently insured separately by 3 different co-freeholders, no management company was set up...

I am more than willing to set up/ pay for building insurance, however, it looks like I cannot do it as the other 2 flats do not belong to me/ the vendor?

Am I right in assuming that the only way forward now is to get the co-freeholders to agree on getting another policy to insure the whole building?

amnblog

This makes no sense Moon. You must have crossed wires.

The structure must be insured as a unit.

moon_river

amnblog wrote: »

This makes no sense Moon. You must have crossed wires.

The structure must be insured as a unit.

Basically the building at the moment is not insured as a whole unit, the vendor wouldn't play ball and get it sorted. Our solicitor cannot satisfy Woolwich, and we are stuck!

Just wondered if there's any way round this..I am stressed to no end. 3am, I am wide awaken.

Senior_Paper_Monitor

Checking the insurance of the freeholder entity (in whatever form) is one of the many actions that a conveyancer of leasehold purchase must conduct for the lender.


If there is no valid block policy in place there is no more he can do.


Presumably the vendor (and other owners) have no wish to sell their leasehold properties other than to (presumably clueless) cash purchasers - no mortgage lender will touch it.

amnblog

What would concern me is the attitude of the 3 'freeholders'.


If between then they have not taken steps to insure the property in the correct fashion what other problems have been stored up?


Has the property been maintained correctly?


Will there suddenly be unexpected service charges?

Senior_Paper_Monitor

Absolutely valid point from amnblog - while I don't think this deal is ever going to happen, the though of sharing financial responsibility for the structure of my home with three others who have demonstrated a willingness to have their investment/home uninsured is decidedly worrying.

Leon_W

Move on. If it hasn't been sorted by now it never will be.


How many times has the offer had to be renewed ?

magpiecottage

It sounds like the OP would be well off out of this. It is a disaster waiting to happen.