No buildings insurance at exchange

sarah2022

Hi all, 
I am having a bit of a panic as we are first time buyers and exchanged on our house in Friday. Our solicitor (who has been really bad), never told us we needed buildings insurance set up for exchange, and never asked to see this before exchanging, however, it is in the terms of our mortgage. I realised 4 days after exchange that we probably needed to sort buildings insurance and discovered this was meant to be in place from exchange not completion. I've now sorted insurance, but I'm worried as we have broken the terms of the mortgage by starting the policy 4 days after exchange. We are due to complete Friday, will this cause any issues on release of funds? Is this neglegance on the solicitors behalf for not flagging the need for buildings insurance to us, and not asking us to provide our policy prior to exchange? I've since read if the house burnt down, we would have been bound to the purchase and had no mortgage or insurance for it. Thanks

user1977

Unless the house burnt down before you started the insurance, there's nothing to panic about.

canaldumidi

Relax.

You now have insurance in place so nothing to worry about.

Brie

I agree with the others that now it's in place all is ok.  I know this is a bit of a shock to find out about these things - it was to me when I was a FTB. 

But I don't think there would be any comeback to the solicitor as they may very well assume that you know the basics as it sounds a bit like one of those things that people talk about in a "well everyone knows that...." even when it's obvious that everyone doesn't know!!

Frankly I might have thought that it's more something your mortgage provider might have mentioned to you - like when in the past they always asked if they could sell you life insurance.

user1977

Brie said:

Frankly I might have thought that it's more something your mortgage provider might have mentioned to you - like when in the past they always asked if they could sell you life insurance.

If the OP has now realised it's one of their mortgage conditions then they obviously were "told" before they exchanged (even if it wasn't particularly highlighted to them).

But I agree the solicitor ought to have explained it, so probably worth some constructive feedback to them about their omission to do so.

eddddy

Just to make sure - are you talking about a freehold house, and not a newbuild?

• If you're buying a newbuild house, the developer is usually responsible for buildings insurance until completion.

• If you're buying leasehold house, it's possible (but unusual) that the freeholder is responsible for buildings insurance.

• If you're buying a leasehold flat, it's very probable that the freeholder is responsible for buildings insurance

As above, as long as nothing has actually happened to the house between exchange and and the date you took out insurance (like fire, flood, break-in, tree falling on it, etc), then there shouldn't be a problem.


TBH, sellers are usually advised to keep their buildings insurance policy in place until completion anyway - just in case the buyer doesn't insure, or doesn't insure properly.

So, if the house had burnt down, they'd probably have grudgingly made a claim on their own insurance anyway.

sarah2022

Thanks all for the reassurance. The actual requirements of the mortgage is that the  solicitor has sight of the insurance to be actioned on exchange of contracts. But they never asked us for this. That's why I feel they solicitors have been negligent as surely you pay them to highlight the legal requirements? 

user1977

sarah2022 said:

Thanks all for the reassurance. The actual requirements of the mortgage is that the  solicitor has sight of the insurance to be actioned on exchange of contracts. But they never asked us for this. That's why I feel they solicitors have been negligent as surely you pay them to highlight the legal requirements? 

It might have been negligence if you had suffered a loss, but as you haven't then what would you be claiming for?

youth_leader

Thanks for posting about this, I'll make sure to tell my daughter when she buys.  

youth_leader

I'd already sent her this book, this is the website that accompanies it.

Home • Help me, I'm buying a house (helpmeimbuyingahouse.co.uk)

sarah2022

Thanks @user1977. I guess I see it as negligence as they failed to take proper care over meeting our mortgage terms. It is surely their legal responsibility to ask us for the policy before exchanging as it is a requirement of our lender. Because nothing happened to the house , doesn't make it OK for me that they exposed us to that risk because they didn't do their job and ask for sight of the policy. I think my frustration is a long list of issues I've had through the process with the solictors, so perhaps this is the final straw situation for me.