Help - my mum (seller) has damaged house between exchange and completion who is liable

[Loujalou]

Sorry for the long title but basically my mum left the tap on in her bathroom over night and it dripped all the way into the kitchen below.

This was yesterday. She was due to complete tomorrow and this happened yesterday.

She is being made to pay the cost of fixing it but it was my understanding that you need buildings insurance at the point of exchange (buyer) and the buyer is responsible. The buyers solicitor is threatening to cancel the completion if my mum doesn't pay £600.

Help!

I was horrified by this when we bought our house. I remember talking to an insurance agent who told me that we needed house insurance from exchange, and I told him how shocked I was and he was really sarcastic with me "well who do you think should insure the house?". Glad to see that it's not just me who assumed that the person living in the house was the one responsible. I remember blurting out "but what if they leave the door unlocked and it gets vandalised, because they don't care anymore because it isnt' their problem?".

Anyway, I think that your Mum is being very responsible offering to pay excess on their insurance. I agree that that's why we have insurance, to cover this kind of thing.

I would assume the CAB have got it right but double check with her solicitor

I'm not going to comment on this particular case - it would be pointless as we don't know the terms of the agreememet.

But for anyone picking up this thread it is important to understand that most contracts for the sale of residential property now incorporate the Standard Conditions of Sale 4th Edition. These Conditions provide that the seller will transfer the property in the same physical state as it was at the date of the contract (except for fair wear and tear), which means that the seller retains the risk until completion.

This is the opposite from the case under the old National Conditions of Sale with which anyone trained more than 20 years ago will be more familiar, and it is also the opposite of the case in most agreements for commercial property.

However it may still be advisable for the buyer to take out insurance from the date of exchange so that if the property on the land he wants to buy burns down before completion he can still buy it and have insurance proceeds to rebuild it. Note that SCS 4th Edition does NOT force the buyer to complete in this situation.

Finally note that a little background information doesn't hurt but you must discuss the implications of any legal agreement, particularly for something as high in value and specialised as property, with a solicitor you have engaged to work for you who is familiar with all the specific details of the transaction.

Thanks for all your help. Am not sure what she signed but that house has gone.

As in completed. Woo hoo.

Just so everyone is aware, on the CAB advice page it says

"Damage caused between exchange and completion

A house may be damaged after contracts have been exchanged but before the sale is completed, for example, a burst pipe or a broken window. It is the seller?s responsibility to inform the buyer of any damage. It is however the buyer?s responsibility to insure the property from the date of exchange of contracts and to have the repairs carried out. The buyer will then have to make a claim on their insurance policy"

It happened to us, the vendors knew there was a problem and decided to tell us 2 minutes before we were due to pick up the KEYS!

That was that the hot water tank was leaking and they had stuffed some towels underneath it. Joy. We had to pay, they made a donation towards it. We were livid. We had overlooked all the crap they had left at the house because they said they would pay the whole amount to fix it

Rather than venturing an unqualified opinion, I am an insurance broker who has been researching this area for the past couple of years. This should not be viewed as professional advice, as I am not aware of individual circumstances or contract variations. However, this is the situation in most cases.

The buyer of a property is responsible for material damage to the property with effect from exchange of contracts, according to section 5 of the Standard Conditions of Sale (5th edition), the contract used almost exclusively for conveyancing in England and Wales. Therefore the buyer of the property is responsible for the repair unless they can prove negligence or recklessness, which is very difficult to do.

The buyer has no right to fail to complete or to delay completion as a result, so if they are threatening to do this, the seller (your mum) could claim compensation under the provisions of the contract for their failure to complete. If they refused to complete altogether, your mum could retain the entire deposit and re-market the house for sale.

Please take legal advice in respect to variations of the wording and individual circumstances, but the above reflects the contract wording in the vast majority of private house transactions.

Chocky this thread was started 6 years ago. I suspect they've sorted it by now.

Indeed titchy, in fact the contracts used for conveyancing have even been updated since the original post! However, you're still reading it... ... and maybe I didn't notice