insurers that cover between exchange and completion

flambo33

Hi guys!

we're buying a house that currently has tenants in, The landlord wont give them an eviction notice until we exchange, however if we exchange and the property was to burn down we would still be liable to buy it. We've been advised to get insurance to cover the period between exchange and completion which for us is a maximum of 3 months (depending on when the tenants leave)!

I'm struggling to find any companies that will cover for over 60 days, if at all. does anyone have any experience dealing with this or know a reputable company that can offer this type of insurance?

Any help would be great! Thanks:beer:

FlameCloud

I think (assuming you are not a landlord anyway) you'd have to be made to buy a house without vacant possession.

TSx

3 months is optimistic... Should they refuse to leave you could easily be looking at 6 months plus (unlikely but needs factoring in)

flambo33

Let me just clear that up. We're buying it with vacant possession. It's a clause in the contract that if the tenants haven't vacated within 3 months we can back out of the deal with no penalty, that's so we're not waiting around if they do refuse, coincidentally I do know the tenant so I'm hoping there will be no issues.

However the seller wont evict them before exchange of contracts, we'll then complete within 14 days of them leaving but we need the insurance to cover the period between exchange & completion, Upto a maximum of 3 months (because after that we'll have either moved in or backed out as the property wont be vacant)

agrinnall

You'll probably need to go to a good broker to stand any chance of finding such insurance. But I'd agree with the other posters that you are mad to even consider doing this - tell the seller that you won't exchange until he has vacant possession and that you'll walk away if he doesn't agree.

flambo33

You all really think this is such a bad idea even though we're protected? =/ My solicitor doesn't seem to have any major concerns, she's just saying that it's rare but not unheard of

agrinnall

We think it's a bad idea because the better way of doing it, as we keep saying, is to only exchange when the seller has obtained vacant possession. If the house is something special or at a very attractive price then it's up to you if you want to go for it, but if it's just an ordinary house at an ordinary house then it makes little sense to incur the expense of the insurance cover (if you can find it) for the potential of a 3 month wait with nothing at the end when you could just buy another property without the complication.

rs65

My policy says:-

The time between exchange and completion when selling your home
We will cover the buyer of your home under Section 1 until the sale completes, as long as the property isn’t insured under any other policy.


Maybe your seller has such cover?

10pence

Agree with the sentiments above about buying with the tenants in place - your solicitor is naive for believing an eviction can be a quick process: issue papers, county court, back to county court and then high court, expensive in both money and time.

The insurance will be a complicated situation too. Arranging short term insurance can be difficult as many main stream insurers don't offer it, hence the comments about the broker.
Other issues will be the tenants; if you exchange with tenants in, then are you their landlords and thus in need of landlord insurance? This will possible need a tenancy agreement in place between you and the tenant for the declaration questions.
Residential and un-occupancy cover won't insure you if the tenants damage them self or the property and won't be able to as the property has tenants in it.

Just a few things to consider and no doubt after my morning coffee kicks in a few more issues will appear. Strongly encourage you to get the property without the tenants, even citing the reasons mentioned here.

highhorse_2

Who have you got your mortgage with? they will typically have a Home Insurance product that they automatically put on risk when you complete - but is backdated to cover you from exchange.


If they arent the cheapest, then take the policy out now anyway and once you complete and the policy is technically live you have 14 days to cancel without penalty.