Who's liable between exchange and completion?

straytabbycat

I have exchanged contracts for a house but not completed the sale, who is liable for the property?

wind has blown down the fence and damaged the paintwork on a neighbours car. He wants to be compensated. Is the company i'm buying for the house from responsible? i haven't moved in yet. Contracts are exchanged but we haven't completed (i'm in England).

The house is empty though as it was reposessd and i'm buying from the company who reposessed it

tbs624

I have always taken out buildings insurance cover from the date of the exchange - I think most solicitors would advise that this was done.

PasturesNew

When you exchange, you take out buildings insurance and are responsible for the building etc.

You aren't responsible if they spill tea on their carpet as they still have contents insurance.

The reason you are legally obliged by your lender to take out buildings insurance is: no matter what happens now you HAVE to buy it. So if it were flooded or burnt down the lender would be lending you money on a pile of bricks. So the insurance is something they will have insisted on being in place before exchange could happen.

straytabbycat

insurance is in place but they set it to start on the day of completion

zorber

If the property is empty and you havent completed then i dont see how he can try and get compensation out of you as you dont own it yet. You need to ask your soliciter for advice. If its a reposesion then who ever owns the building (bank ?) should have insurance and it should be refered onto them and their insurance.

PasturesNew

Shelter says: http://england.shelter.org.uk/advice/advice-4191.cfm

"If the property is freehold, the buyer usually becomes legally responsible for buildings insurance from the date contracts are exchanged. If the property is leasehold, the freeholder is normally responsible for arranging insurance, but the buyer can be asked to pay her/his share of the costs involved. Ask your solicitor to check this, and make sure the property is insured properly while you are responsible. If this is the case and the property is damaged between exchange of contracts and the completion date, the buyer's insurers will have to pay for any repairs that are needed. However, s/he is not responsible for your personal belongings, so you should make sure your contents insurance is valid until you move out."

chappers

I was always told you should be covered from exchange, however i have just had a shuffty through my policy and it says.
"Cover will extend to anyone buying the home who will have the benefit of section 1(buildings cover) until the sale is completed or the insurance ends, whichever is the sooner"

So basically you would normally be covered under the vendors insurance provided it is still in place(bear in mind other policies may be different).
However and you are not going to like this one probably, most policies revert to just FLEA cover after the building has been unoccupied for a certain period(usually 60 days)unless an extra premium has been paid to specifically cover the void period.
Basically the way I see it is you should have been covered by your own insurance, you may get lucky and be covered by the vendors policy if it is still in place , but that may all be irrelevant if there is an exclusion due to the property being empty.

If you are uninsured then the neighbour will have to either claim on his own insurance(probably motor) or take you/the vendor to court for the damage , I suspect there would have to be proof that the fence was poorly maintained and that this wasn't caused by unpredictable freak weather(act of god).

chappers

PasturesNew wrote: »

Shelter says: http://england.shelter.org.uk/advice/advice-4191.cfm

"If the property is freehold, the buyer usually becomes legally responsible for buildings insurance from the date contracts are exchanged. If the property is leasehold, the freeholder is normally responsible for arranging insurance, but the buyer can be asked to pay her/his share of the costs involved. Ask your solicitor to check this, and make sure the property is insured properly while you are responsible. If this is the case and the property is damaged between exchange of contracts and the completion date, the buyer's insurers will have to pay for any repairs that are needed. However, s/he is not responsible for your personal belongings, so you should make sure your contents insurance is valid until you move out."

I think the OP is the buyer, so according to the law would be liable.