Seller Pulled Out of Purchase & Home Buyer Protection Insurance Claim Rejected

TheJP

Even if you did get in writing i think they will still reject your claim due to the fact they pulled out because you hadn't had a mortgage offer at the time. These policies usually aren't worth the paper they are written on.

housebuyer143

I would say they are denying your claim because the seller withdrew for the sole reason that you were taking too long to get a mortgage offer. That's an uninsurable event on the T&Cs.

We will not pay for any claim:

a. Where the vendor withdraws from the sale due to any delays, action or inaction

caused by you or your solicitor.

b. Where you failed to obtain a mortgage offer.

They are still selling it, so it's not because they changed their mind, it's an issue with you. I imagine if you got the mortgage offer tomorrow they would proceed with you again? 

DullGreyGuy

bbluvbb said:

Thank you all for your suggestions. The email from the vendor didn’t state the exact reason for pulling out in the email, but we know it was because they wanted to finalise the sale as quickly as possible. While we were still waiting for the bank to approve our mortgage, the vendor decided not to wait and chose to remarket the property.

I’ve reviewed the terms and conditions, checked what’s insured, and confirmed that I meet the criteria.

We will, subject to what is not insured, the claims provisions and conditions of this policy

pay the costs and expenses following the purchase of the property failing as a result of

an insured incident shown as operative in the schedule.

Provided that:

1. the full premium has been paid.

2. the date of occurrence is during the period of insurance.

3. any claim is reported to us:

a. during the period of insurance.

b. immediately after you became aware of circumstances which may give rise to a

claim.

4. you do not deliberately and knowingly cause a delay or use unreasonable behaviour

that results in the failed purchase.

5. the purchase of the property is not subject to a contract race or sealed bids.

6. you are using a solicitor to conduct the conveyancing of the property.

7. you have not had a survey carried out on the property.

8. you have made an offer to purchase the property and that offer has been accepted by

the vendor or their agent in writing.

9. an application for any mortgage on the property has been agreed in principle.

10. the policy is issued no later than three working days from the date on which you first

instruct a solicitor.

it does not have the wording of official letter is needed from the T&Cs

Insured incidents

1. Withdrawal from the sale by the vendor because of gazumping

The vendor withdrawing from the sale following receipt and acceptance of an alternative

offer providing that the alternative offer is at least £1,000 greater than the property price.

2. Withdrawal from the sale by the vendor for other reasons

The vendor withdrawing from the sale for reasons other than set out in paragraph 1 above

and which are beyond your reasonable control.

We will not pay for any claim:

a. Where the vendor withdraws from the sale due to any delays, action or inaction

caused by you or your solicitor.

b. Where you failed to obtain a mortgage offer.

So the claim fails on two points... you cannot substantiate the reason for the vendor pulling out and even if you could it would be an exclusion on either a or b as you've created delays and haven't managed to get a mortgage offer. 

These policies are worth the paper they're written on but they are much more limited in scope than people think they are; personally didnt buy one but went with a conveyancer who waived their fees if the vendor pulled out and a mortgage broker that was commission only so my only losses if a vendor pulled out would be the disbursements 

Gentoo365

If you can't get a mortgage offer then arguably you dropped out. They could just say they were ready to exchange and you were not able to.

Basically they may not want to say they decided not to proceed as it was not their choice. The cause was your lender would not issue a mortgage offer. 

It also seems odd to remarket as that just means start again, unless the issue with the mortgage cannot be resolved (e.g. your lender requires something that cannot be provided).

RHemmings

If the estate agent won't give a formal letter, then in the OP's situation I would raise an official complaint with them through their published complaints procedure. 

user1977

RHemmings said:

If the estate agent won't give a formal letter, then in the OP's situation I would raise an official complaint with them through their published complaints procedure. 

Eh? What does the estate agent have to do with it?

TheJP

user1977 said:

RHemmings said:

If the estate agent won't give a formal letter, then in the OP's situation I would raise an official complaint with them through their published complaints procedure. 

Eh? What does the estate agent have to do with it?

Agree, the OP has no agreement with the EA.

horsewithnoname

user1977 said:

RHemmings said:

If the estate agent won't give a formal letter, then in the OP's situation I would raise an official complaint with them through their published complaints procedure. 

Eh? What does the estate agent have to do with 

They originally said the claim was refused because the EA refused to give a letter rather than an email. 

EssexHebridean

horsewithnoname said:

user1977 said:

RHemmings said:

If the estate agent won't give a formal letter, then in the OP's situation I would raise an official complaint with them through their published complaints procedure. 

Eh? What does the estate agent have to do with 

They originally said the claim was refused because the EA refused to give a letter rather than an email. 

They said the seller's solicitor, as far as I can see. 

OP - have one last attempt by getting your solicitor to request the letter from the seller's solicitor. The Seller's solicitor can't speak with you as you ae not their client - they can speak with your solicitor though. I'm afraid as others have said though, I still suspect the insurer will refuse to pay out in the circumstances. 

mills705

bbluvbb said:

Thank you all for your suggestions. The email from the vendor didn’t state the exact reason for pulling out in the email, but we know it was because they wanted to finalise the sale as quickly as possible. While we were still waiting for the bank to approve our mortgage, the vendor decided not to wait and chose to remarket the property.

I’ve reviewed the terms and conditions, checked what’s insured, and confirmed that I meet the criteria.

We will, subject to what is not insured, the claims provisions and conditions of this policy

pay the costs and expenses following the purchase of the property failing as a result of

an insured incident shown as operative in the schedule.

Provided that:

1. the full premium has been paid.

2. the date of occurrence is during the period of insurance.

3. any claim is reported to us:

a. during the period of insurance.

b. immediately after you became aware of circumstances which may give rise to a

claim.

4. you do not deliberately and knowingly cause a delay or use unreasonable behaviour

that results in the failed purchase.

5. the purchase of the property is not subject to a contract race or sealed bids.

6. you are using a solicitor to conduct the conveyancing of the property.

7. you have not had a survey carried out on the property.

8. you have made an offer to purchase the property and that offer has been accepted by

the vendor or their agent in writing.

9. an application for any mortgage on the property has been agreed in principle.

10. the policy is issued no later than three working days from the date on which you first

instruct a solicitor.

it does not have the wording of official letter is needed from the T&Cs

Insured incidents

1. Withdrawal from the sale by the vendor because of gazumping

The vendor withdrawing from the sale following receipt and acceptance of an alternative

offer providing that the alternative offer is at least £1,000 greater than the property price.

2. Withdrawal from the sale by the vendor for other reasons

The vendor withdrawing from the sale for reasons other than set out in paragraph 1 above

and which are beyond your reasonable control.

We will not pay for any claim:

a. Where the vendor withdraws from the sale due to any delays, action or inaction

caused by you or your solicitor.

b. Where you failed to obtain a mortgage offer.

Did you have an AIP? If so then id say if you were literally in the line to be approved for your mortgage and within normal timeframes of a few weeks then the insurer is being unreasonable and should proceed with the claim payout.

You also have the reason - they want a quick sale and a mortgage buyer isnt going to be quick in moving forward as they want.