Flood after exchange

Does anyone know the legal position if there is a flood after exchange but before completion?

I know a buyer has to have insurance to exchange so does that mean it is down to them?

Does anyone know the legal position if there is a flood after exchange but before completion?

 

I know a buyer has to have insurance to exchange so does that mean it is down to them?

It's a bit complex. Here's my views:

1. Common Law does not imply anything.

2. So it all depends on the contract terms.

3. Most- not all- sale/purchase transactions rely on the Standard Conditions of Sale.

4. But auction transactions more often rely on the Common Auction Conditions.

5. SCS/CAC can be overridden by Special Conditions, added to the contract by arrangement between both parties' solicitors.

6. Of course, a block of flats is almost always insured on a single block policy, so cover continues unaffected.

7. But let's assume that the property is a house sold by V to P and that SCS apply unaltered by any Special Conditions.

8. P is obliged to take the property on completion in the same state as it was on exchange.

9. V is not obliged to insure beyond exchange but probably will anyway- because damage in the interim would mean that V cannot deliver the property on completion in the same state as it was on exchange.

10. V would have to pay to P (or allow as a deduction from the price payable) the amount of any money obtained from V's insurer (less whatever V has spent on rectification). That insurance money is held by V on trust for P.

11. P (or, often, P's mortgagee [lender]) won't trust V- and will often insure from exchange. If so, V can then cancel own insurance.

So tell us a little more about your case (omitting any confidential details, of course).

IMHO, The house would not be as you bought it and that would be a material fact therefore the purchace criteria has changed. Speak to your solicitor, i'm sure you could pull out or insist the current owners insurers (if there are any) agree to reinstate the property.

Tricky situation!!! Not trying to jump in on your problem but happy to provide a quote.

I know a buyer has to have insurance to exchange so does that mean it is down to them?

Yes.

After exchange, the property is your responsibility.

Yes.

After exchange, the property is your responsibility.

Not necessarily. Please read post #2.

The sale has now completed and the upshot was it was the buyers reponsibility.

It was my mother-law's house (she had moved out a week earlier) and we exchanged on the friday. Visited the property on the saturday and discovered the flood which was a burst mains pipe under the property.

The buyers insurance company were not keen on paying up as it was found so close to exchange and therefore a question mark over when the leak happened.

The contracts stated it was the buyers reponsilbily but their solicitor wanted us to claim on our insurance so the loss adjustor came out looked at the carpets which we may get a pay out on (though they went with the property and were to be disposed of by the buyers)

Claim on the leak not so sure. Quote to fix about £1000.

May give any pay out for the carpets to the buyers as a gesture of good will but as they mucked us about so much throughout the sale process not sure. Not sure how we stand legally though on that point.

£1000 sounds expensive! I'm a qualified plumber, if you want a second opinion/quote, let me know.

Glad you (sort of) have it sorted.

Doesnt look like we have to pay (we were the venders) so not too bothered

Ah, I'd been reading the thread assuming you were the buyer. Doh!