Burst pipe between Exchange & Completion

twinter12

Please help there has been a burst pipe in property we are buying - we have exchanged but not due for completion until 16th March - who is responsible for repairs - both insurers are saying each other and solicitor unsure as never happened to them?

We are insured on the property as of completion but its our insurers say we dont own till 16th so its thier insurers responsbility.

newatc

My understanding is that after exchange you are the new owner and responsible. You should have insurance for new property from exchange date.

davidmcn

I'd be more worried that your solicitor doesn't understand the contract they've negotiated on your behalf!

newatc

Found this on the Which site:

• Once exchange has occurred, you become responsible for insuring the property, so you'll need to arrange for buildings insurance in advance and pass the policy number to your legal firm.
• It is worth asking the vendor who currently provides their policy, as you may want to continue with that insurer. This is a particularly good idea if the property is in a flood-risk area or has subsidence problems, as the insurer will already have details on the building and associated risks

Madmel

Whilst you should have insured it from exchange, it is my belief that the vendor has to leave the property in the condition it was at exchange when you complete.

When we tried to insure our current house from exchange (we had 3.5 months between exchange & completion back in 2006!) the insurers would only include us as an interested party, or words to that effect. We were not allowed to insure it in our own names at that point because we did not own it. However, that may be because it was not a standard buildings insurance policy, but the house was being used as a B&B and there were 2 letting holiday cottages.

cloo

This happened to a friend. They had insurance in place, which is a condition of exchange IME (for things exactly like this), and their insurers paid for remedy.

The damage in their case was significant and insurance paid towards them renting elsewhere for around six months until their house was fixed.

I hope things aren't too awful and you get it sorted soon.

eddddy

Madmel wrote: »

Whilst you should have insured it from exchange, it is my belief that the vendor has to leave the property in the condition it was at exchange when you complete.

You're confusing two different things...

• The vendor must not do anything to damage/change etc the property between exchange and completion.

• But presumably the vendor did not break the pipe (or do anything negligent) - the pipe burst due to extreme weather conditions.

Therefore, that is likely to be a risk that the buyer has to bear - and should insure against.

The solicitors probably used the Standard Conditions of Sale 5th edition, which say:

Condition 5.1 !!!8211; risk and insurance

5.1.1 The property is at the risk of the buyer from the date of the contract.

(date of the contract means date of exchange of contracts)

Link: https://www.lawsociety.org.uk/support-services/advice/articles/standard-conditions-of-sale/

Madmel wrote: »

When we tried to insure our current house from exchange (we had 3.5 months between exchange & completion back in 2006!) the insurers would only include us as an interested party, or words to that effect.

The Standard Conditions of Sale 5th edition came into use in 2011. The previous editions stated that the seller was responsible for insuring.

twinter12

We do have property insured (as advised) but our insurers say we dont own property so not their responsibility

Tom99

twinter12 wrote: »

We do have property insured (as advised) but our insurers say we dont own property so not their responsibility

[FONT=Verdana, sans-serif]That's nonsense, you have an insurable interest in the property because you are contracted to buy it at the agreed price.[/FONT]
[FONT=Verdana, sans-serif]If your insurer was right nobody would bother insuring on exchange.[/FONT]

xylophone

https://www.frettens.co.uk/site/library/frettensnews/Insuring_a_property_after_exchange_of_contracts

may be of interest.

eddddy

I guess one other thought... is there sufficient damage to the building to make an insurance claim worthwhile?

For example, if the burst pipe is readily accessible and it's a case of a plumber replacing a small section of pipe, and letting the affected area dry out - it may not be worth paying the policy excess and increased future premiums.

Obviously, if there's major damage like a ceiling coming down, an insurance claim might be worthwhile.

(And the vendor may want to make a contents claim, if any of their contents are damaged.)