Completion agreement post exchange (owner damaged property)

PURPLEREDHAT

Thank you for all these thoughts. The owner accidentally drove his electric car into the front wall of the house causing serious structural damage. He has accepted liability and the cost of repairs to the house I am buying and repairs to the neighbours house will be covered by his insurance. Fortunately I got house insurance when I exchanged and I will be accommodated once the Loss Adjuster has sorted out a time line for the repairs ( the incident happened 3 weeks ago so it's all taking a very long time to get processed). I have a maximum amount of money that can be spent and given the work is predicted to take 6 months ( but could be longer) there is a need to think about what I can afford to live in. My choice would be to rescind the exchange contract and walk away but the owner could then refuse to return my 10% deposit. He does not want to rescind.
Whenever I complete- whether part way through the building works or at the end once the house is returned to the state it was in at exchange- I will need an agreement. It will be more complex if I complete before building works are completed and I was hoping someone might have experience to share.
If I were to buy a house again I would want an addendum to the Conditions of Sale on the exchange contract to the effect that if the owner damages the house so badly that it cannot be lived in there should be the option to rescind and have the deposit returned. 

Herzlos

Surely his car insurance would be on the hook for the alternative accomodation whilst the house was made habitable? Though I think that's more likely to only cover the time you own the house and not any losses associated with delaying the house, but that'd be one for lawyers to figure out. 

In which case it's mostly the inconvenience you're looking at for buying a house that you can't move into immediately. 

PURPLEREDHAT

Herzlos said:

Surely his car insurance would be on the hook for the alternative accomodation whilst the house was made habitable? Though I think that's more likely to only cover the time you own the house and not any losses associated with delaying the house, but that'd be one for lawyers to figure out. 

In which case it's mostly the inconvenience you're looking at for buying a house that you can't move into immediately. 

The inconvenience and stress are huge but unless I take out a 'tort of negligence' claim I have to accept that loss because the exchange contract only holds the seller liable for the actual damage to the property. 
My house insurance policy does not include legal expenses and so I am trying to work out how to sort the detail of a completion agreement without getting myself into debt. I have had one quote so far for £6K - I am looking at other options but it's hard to find a lawyer with expertise in this area.

silvercar

I'd be getting a second legal opinion on whether you can rescind. 

If you walked away, the seller could pursue you, but would have a duty to mitigate their losses, which means claiming on their own insurance and/or selling to a builder.

How much is 10%? If there is any chance that your total losses on the deal could amount to that sum in any case, then I might be looking at walking away and pursuing the return of your deposit separately. 

eddddy

PURPLEREDHAT said:

My choice would be to rescind the exchange contract and walk away but the owner could then refuse to return my 10% deposit. He does not want to rescind.

Hopefully, you're not relying on advice from the seller's solicitor about stuff like this.

Obviously, the seller's solicitor will be trying to persuade you to do what's best for their client, not what's best for you.

saajan_12

PURPLEREDHAT said:

Thank you for all these thoughts. The owner accidentally drove his electric car into the front wall of the house causing serious structural damage. He has accepted liability and the cost of repairs to the house I am buying and repairs to the neighbours house will be covered by his insurance. Fortunately I got house insurance when I exchanged and I will be accommodated once the Loss Adjuster has sorted out a time line for the repairs ( the incident happened 3 weeks ago so it's all taking a very long time to get processed). I have a maximum amount of money that can be spent and given the work is predicted to take 6 months ( but could be longer) there is a need to think about what I can afford to live in. My choice would be to rescind the exchange contract and walk away but the owner could then refuse to return my 10% deposit. He does not want to rescind.
Whenever I complete- whether part way through the building works or at the end once the house is returned to the state it was in at exchange- I will need an agreement. It will be more complex if I complete before building works are completed and I was hoping someone might have experience to share.
If I were to buy a house again I would want an addendum to the Conditions of Sale on the exchange contract to the effect that if the owner damages the house so badly that it cannot be lived in there should be the option to rescind and have the deposit returned. 

OR you complete as scheduled, do the repairs yourself, and sue the seller for the cost. If you use your insurance they would do the suing, and if the seller wanted they could refer the cost to their insurer. The benefit is the repairs are under your control and you can ensure they were done properly. That also avoids the need for a completion agreement etc. 

PURPLEREDHAT

silvercar said:

I'd be getting a second legal opinion on whether you can rescind. 

If you walked away, the seller could pursue you, but would have a duty to mitigate their losses, which means claiming on their own insurance and/or selling to a builder.

How much is 10%? If there is any chance that your total losses on the deal could amount to that sum in any case, then I might be looking at walking away and pursuing the return of your deposit separately. 

Thank you. I've had several separate legal opinions all saying the same thing which is that I would have to sue on grounds of 'tort of negligence' and there is no certainty I would win.
If I walked away I would lose about £80K so not an option.
To my mind the law needs to change.

Herzlos

PURPLEREDHAT said:

Herzlos said:

Surely his car insurance would be on the hook for the alternative accomodation whilst the house was made habitable? Though I think that's more likely to only cover the time you own the house and not any losses associated with delaying the house, but that'd be one for lawyers to figure out. 

In which case it's mostly the inconvenience you're looking at for buying a house that you can't move into immediately. 

The inconvenience and stress are huge but unless I take out a 'tort of negligence' claim I have to accept that loss because the exchange contract only holds the seller liable for the actual damage to the property. 
My house insurance policy does not include legal expenses and so I am trying to work out how to sort the detail of a completion agreement without getting myself into debt. I have had one quote so far for £6K - I am looking at other options but it's hard to find a lawyer with expertise in this area.

Yeah you're likely only going be able to get to the state the house was in before the crash. 

What is your ideal outcome here? Are you:

1. Hoping to get the house repaired by the seller, with their insurance funding alternative accomodation in the mean time

2. Hoping to buy the house and then have the sellers insurance pay for the repairs and funding alternative accomodation in the mean time
or
3. To unwind the deal, get your deposit back and find something else?

user1977

PURPLEREDHAT said:

silvercar said:

I'd be getting a second legal opinion on whether you can rescind. 

If you walked away, the seller could pursue you, but would have a duty to mitigate their losses, which means claiming on their own insurance and/or selling to a builder.

How much is 10%? If there is any chance that your total losses on the deal could amount to that sum in any case, then I might be looking at walking away and pursuing the return of your deposit separately. 

To my mind the law needs to change.

It's not really the law to blame here, it's what is common practice to agree in the contract.

In theory you could instead have said that either party would have the right to resile without penalty if there was significant damage to the property (which is the norm in Scottish sales). Though that would have other consequences if you are in the middle of a chain.