Once Exchanged, is the Property Mine?

anotheruser

I might have got the wrong end of the stick here but am I right in saying, when the contracts are exchanged, do I then own the property and need insurance and everything on it?

If so, do most people exchange and complete very quickly?

What happens if a huge hole appears in a wall (for example)? I guess the contract states the condition, so if it isn't handed over like that then I can claim some sort of recompense?

Thanks

AnotherJoe

You don't own it but you do need to insure it. Yes generally it's a short time, usually no more than 3-4 weeks.
And yes were the owner to damage it they should put it right or you could come to an agreement about recompense.

david1951

The house might be insured by both parties. However, you (and your lender) don't want to rely on the vendor's insurance as it might be inadequate, or non-existent.

Your solicitor will make sure you have adequate buildings insurance.

Kynthia

You don't own it, but you do have an insurable interest in the property as you are now legally obliged to purchase it. You need to insure it if your contract states you do and your solicitor will tell you that.

BJV

You are legally bound to buy the property ( so no backing out now ) and the vendor is legally bound to sell it.

I also would not count as another post has said on the vendor's insurance. Instead get your own just make sure that you tell them the whole situation ie, you have not completed yet.

We have bought a few properties recently some commercial and some private. Both can in theory exchange and complete on the same day but normally your solicitor will try to exchange on a Monday then complete Friday. Well certainly in my experience. This means that they have all the paperwork they need and know that both parties are committed to the sale.

We had a property which we had exchanged on and at the last minute the completion date was moved simply because the local council had attached a charge for care home fees. We spoke to our solicitor and she said that the only way to get cost back would be through small claims. ???

I would speak to your solicitor. They will be able to give you better advice.

eddddy

In simple terms, exchange of contracts is a bit like this:

- Buyer pays a deposit and 'promises' to buy the property on [a specified date (the completion date)]
- Seller 'promises' to sell the property on [a specified date (the completion date]

Neither side can back out.

If, for example, the property is struck by lightening and burns down to a pile of ashes, the buyer's 'promise' to buy the property still stands. So it's sensible for the buyer to take out insurance.


Some people like 4 weeks between exchange and completion, in order to do things like book a removal company, book time off work, arrange phone/broadband/Sky etc. Others are happy to move more quickly.

Out,_Vile_Jelly

My mortgage provider issued a helpful booklet explaining every stage of the process; did you not get sent one? Martin also has a good guide to house buying that you can download on this site.

You shouldn't be making the biggest purchase of your life without understanding what Exchange and Completion mean.

TBagpuss

As others have said, you don't own the proeprty until completion, but it is normally a condition of your mortgage offer that you have insurance in place from the date of exchange. If you are taking out buildings insurance via your mortgage lender this will *normally* include cover from date of exchange automatically, but do double check.

rosie383

Check with your current insurer as well. Ours covered our new property between exchange and completion for no extra cost. Every little helps!

elverson

You might find this useful as well.

http://hoa.org.uk/advice/guides-for-homeowners/i-am-buying/how-do-i-exchange-contracts/