To not want to take out an indemnity policy?

[TulipsInBloom1]

Selling next week. Afaik (confirmed from everyone) , everyone and everything is in place to exchange apart from my redemption statement which will arrive Monday.

Solicitor has been in touch to say that deeds to my property I am selling state that buildings insurance should be under both our names and the owner of the flat upstairs (terraced home in two flats).

This was not something we were aware of, and we hold buildings insurance for ours and upstairs has their own for theirs.

They have now asked that we take out indemnity insurance (200 quid) because of this. Why?!

When our buyers move in they will be taking out their own buildings insurance. Any buildings insurance we have will not be valid once the flat is no longer ours.

What would an indemnity policy do?

Could you explain more fully? What is happening? Indemnity for what? Too many gaps to try to fill in.

Are they saying that your buildings insurance is invalid and they want you to pay for valid insurance until the property is sold? Presumably this would be to protect the buyers if the property was damaged/caught fire between now and the sale going through and them having their own insurance.

Theyve not explained it tbh. Apparently our deeds (ancient!) say our property's building insurance should be in both our and upstairs flats name. And that we should take out an indemnity policy against this.

I am an insurance lawyer so I think I may be able to explain this. It is in two parts (1) Because you live in a flat you should have insurance jointly with other flat owners - the reason for this is that if the whole building burnt down and you had separate insurance you would have no way of compelling the other owner to spend their insurance payout on reinstating the building jointly with you. Your payout alone wouldn’t be enough to reinstate the whole thing because you only own part of the building and can therefore only insure part of it (2) Once you have exchanged, you are obliged to complete come what may, or get sued. If the whole building burns down between exchange and completion (and yes, this happens more often than you might think) you are still obliged to complete. If you don’t have insurance enabling you to reinstate the whole building - which you don’t for the reason explained above - you will be unable to complete. This puts both you and the buyers at risk in the period before completion. You’re the one who should be insuring the property adequately at all times before completion and that’s why the buyers expect you to pay.

I have to caveat this by saying that I am not your lawyer and am not advising you, and you should ask them why you have to do this. But this is an educated guess as to why they are saying this, which I hope may help you.