Exchanged contracts - and the ceiling has fallen down!

barnaby-bear

minimike2 wrote: »

At exchange of contracts you are advised to get your own insurance in place for a reason!

So I guess it just depends on what type of person you are.

In case you encounter ar5eholes like this and they flit the country.... hopefully the OP will be hunted down though....

barnaby-bear

Catblue wrote: »

I thought that the buyers had to have buildings insurance in place for the property from the date at which they exchanged contracts.

Would not the buyer's insurance be liable for this?

As a general point, this is one of the risks when there is a long time between exchange and completion.

They would pay up so the buyer could get it fixed then recover the monies from the seller/their insurer.... it's their house....

silvercar

You have insurance from exchange as you are committed to complete. Solicitors usually advise sellers to keep their insurance going until completion in case problems like this occur.

Effectively the property is insured by both parties between exchange and completion.

Captain_Mainwaring_2

silvercar wrote: »

You have insurance from exchange as you are committed to complete. Solicitors usually advise sellers to keep their insurance going until completion in case problems like this occur.

Effectively the property is insured by both parties between exchange and completion.

Where risk passes to the buyer on exchange of contracts, he would be well advised to insure the property from exchange, since otherwise he will have to fund any accidental damage to the property out of his own pocket, subject to:

• Section 47 of the Law of Property Act 1925, which states that where, after exchange, money becomes payable under any policy of insurance maintained by the seller in respect of damage to the property which he has contracted to sell, that money shall be paid to the buyer at completion (or on receipt of the same by the seller, if later) – note that both the Standard Conditions of Sale (Condition 5.1.4) and the Standard Commercial Property Conditions (Condition 7.1.5) exclude Section 47, and that it is subject to any consent of the insurers which may be required and also subject to payment by the buyer of the proportionate part of the insurance premium from exchange;
• the seller’s duty to take reasonable care of the property between exchange and completion .

However, the seller would also be well advised to maintain his insurance of the property between exchange and completion, in case the buyer defaults on his purchase, and the seller is left with a damaged property and no buyer. Accordingly, it is not unusual for both parties to insure the property between exchange and completion, which may give rise to difficulties if the property is damaged or destroyed by an insured risk between exchange and completion, since each insurer will only pay out to each party half the amount insured.