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    • ChrisMid
    • By ChrisMid 6th Mar 18, 11:22 PM
    • 3Posts
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    ChrisMid
    Setting completion date for five months time
    • #1
    • 6th Mar 18, 11:22 PM
    Setting completion date for five months time 6th Mar 18 at 11:22 PM
    Hello all,
    I am looking at purchasing my first property and need some advice. I am currently renting with a lease that expires on September 1st. I have found a property that I am interested in and have agreed with the current owner to do the deal, but not move in until August 1st. I basically just want to know if this is a good idea and any potential pitfalls that may come up.

    Is the seller legally bound to move out on August 1st? Will I incur any interest or mortgage payments during this time?

    Any information anyone can share with me is greatly appreciated.

    Kind regards,
    Chris
Page 1
    • Tom99
    • By Tom99 7th Mar 18, 1:44 AM
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    Tom99
    • #2
    • 7th Mar 18, 1:44 AM
    • #2
    • 7th Mar 18, 1:44 AM
    Does your mortgage offer run as far as September?

    You will need to stump up the 10% deposit when you exchange but will not incur mortgage interest until after you complete.

    If your contract says the seller completes with vacate possession on 1st Sept then that's what they must do.

    You will have to insure the property yourself from exchange and I would double check with the insurance co you use that you will be fully covered for all those months because if the place burns to the ground you will still be obliged to buy it at the agreed price on 1st Sept.
    • ChrisMid
    • By ChrisMid 7th Mar 18, 4:29 PM
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    ChrisMid
    • #3
    • 7th Mar 18, 4:29 PM
    • #3
    • 7th Mar 18, 4:29 PM
    Thanks for your response Tom. I don't yet have a contract with the seller, but we have discussed it in person - I wanted to get some information on it first.

    With regards to the mortgage, I have an offer in principle, but this expires prior to August 1st, is this something the ledner will be happy to do?

    With regards to insurance, I have read that I can put a clause in the contract which states they will insure the house until completion date - is this true? Otherwise, as you say, I would be putting myself at risk should the property burn down.

    Cheers,
    Chris
    • Tom99
    • By Tom99 7th Mar 18, 5:01 PM
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    Tom99
    • #4
    • 7th Mar 18, 5:01 PM
    • #4
    • 7th Mar 18, 5:01 PM
    With regards to insurance, I have read that I can put a clause in the contract which states they will insure the house until completion date - is this true? Otherwise, as you say, I would be putting myself at risk should the property burn down.
    Originally posted by ChrisMid
    You may be right but I don't think so, your mortgage co will insist that you insure it at exchange of contracts and your solicitor will want to see proof.
    If the property burns down you will still have to buy it but your insurance will pay to rebuild it.
    • ChrisMid
    • By ChrisMid 7th Mar 18, 5:48 PM
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    ChrisMid
    • #5
    • 7th Mar 18, 5:48 PM
    • #5
    • 7th Mar 18, 5:48 PM
    So are there any downsides to this then? Does the insurance cover anything they may do until the move in date? Am I at risk of them defiling the property in some way between the exchange date and the completion date? I would have assumed that the property would have to be in the same condition on completion as it was at the time of exchange?
    • Tom99
    • By Tom99 9th Mar 18, 8:02 AM
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    Tom99
    • #6
    • 9th Mar 18, 8:02 AM
    • #6
    • 9th Mar 18, 8:02 AM
    You can contract for the seller to continue to insure the property but I am not sure that helps much as it would just be the seller dealing with a claim rather than you.

    Since the standard contract also contains the clause under risk that “The property is at the risk of the buyer from the date of the contract” it may be better to have control over any insurance claim.

    The contract also says the buyer accepts the property in the physical state it was in at the date of the contract. I can't find it and maybe its implied that therefore the seller has to hand over the property on completion in that same physical state ie he can't demolish it and say 'there you go chum'

    I would think the insurance side of things can be ironed out but if your mortgage offer runs out before 1st August they may not renew it on the same terms.
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