Buyers rights after exchange

[MollyHoney]

Hello,

We are in the middle of purchasing a property. The exchange has happened early Jan and the completion was supposed to happen 9 days later as suggested by our solicitor.
However, 2 days before completion we got an email saying that there has been a pipe burst in the property and some damage as a result. We checked it out and the ceilings had come down in a few rooms, wet flooring carpets, and bubbles in the wall. As a first we were told since it's after exchange the seller isn't liable for insurance so we had to contact ours. When we contacted our insurance they said since we haven't lived in the property we cannot claim anything. However, after a bit of pestering they said the sellers insurance will need to put in a claim request with them and then they would pay for 30percent for the claim.
In the meanwhile the sellers offered to pay 10k for the damages to go ahead with completion . We agreed. However , we had to inform our lenders about this damage. They said we cannot just take money from the sellers and it could be related to money fraud. The lenders have now asked for the seller to repair the damage and then they will make a decision on if they want to proceed.
We thought of checking if the sellers would just do the work instead of giving us the money and they seemed to hav been on the same page. However, we understood from the agent today that they have decided to seek advice from a barrister. We don't understand why. We are the ones at risk with the possibility of the lender not giving us a mortgage and us loosing our entire deposit.
Our contract states that the seller is not liable for insurance after exchange. But also that the house has to be in the same physical state that it was at exchange for completion to take place. We had been to the house before exchange and it was fine.

We are under a lot of stress now as we don't know how to proceed. Don't think we can pull out but the seller can just take their time.in the meanwhile the house we will ultimately need to buy is sitting in wet condition. It just seems so unfair that we have to bear all the pain to a house that we don't even have keys to.

Has anyone been in this scenario between exchange and completion? How has it resolved?

Hello, what a nightmare. Suggest you report this and ask to have it moved to legal?

Sorry to hear this, what a mess, it must be a very stressful situation all round.

I would be expecting my conveyancing solicitor to be picking this up and advising me on this.

The property still belongs to the seller, so at a guess it's surely their responsibility to have the property in the same condition at completion as it was at exchange - were you told to insure it from the point of exchange? I wasn't last time I moved (post covid, so not that long ago), but that said I don't remember there being anything at all about insurance in the contract.

I am just applying common sense and logic without any legal knowledge here.

What would the situation be if the house had burned to the ground?

Again a guess - but the sellers are probably getting a barrister to look into the situation on the advice of their conveyancing solicitor?

Whatever the outcome you need good legal advice, which I suspect you might end up paying for unfortunately. Lots of good advice to be found in here but whoever helps will surely need all the finer details and to see the contract?

I hope you can get it sorted out and end up with a positive outcome. Good luck.

@Snowkitty it's standard to insure from the point of exchange because at that point you are legally bound to proceed with completion and have financially committed the deposit.

I'm surprised you weren't advised to do so.

Thank you for your replies

It was a requirement to have insurance in place from exchange by our lenders and we were also advised by our solicitor. However, insurance now claim that since we haven't lived there they can't do much unless the seller claims insurance.

Unfortunately all the legal aspects at the moment seem to be in the favour of the seller which is a bit mad as buyers don't even have access to the property that they are being responsible for.

Our solicitor seems to give us options for the advice isn't there. We may look for second opinions now. We weren't as worried earlier as we assumed the seller would fix and we would go ahead with the sale. But seeing how they can delay this forever and with a barrister involved has got us apprehensive.

This is a rare scenario so none of the people working with us know how it could go so was just trying to see if anyone has been in this situation and how it's been resolved.

@MollyHoney you would get better advice asking MNHQ to move this to the Legal board on here.

Your solicitor/conveyancer absolutely should be seeking advice on this themselves if they don't know how to proceed.

@PragmaticIsh am sorry ..new to this..how do I do this? Do I just tag MNHQ?

I think the quickest way is to use the report button under your OP to report your own thread and explain you want it moved.
But there's actually nothing to stop you just cutting and pasting your OP and starting another thread in legal, because you might well continue to get useful advice here too.
Good luck, I hope you get it sorted.
I'm definitely no expert but one way or another it's covered. Insurance will love to argue the toss over which of them will cover it. What a horrible thing to happen just before you move - although I suppose better then than a day or so after you move in, which would have been even worse.

I would ask the insurance company to tell you where in the policy it says that you must have lived there and check that this is actually what it says. They have to abide by what the policy actually states.

We have always understood that we need insurance to cover new house from point of exchange. Our insurance has always been valid as long as the new property is occupied, it hasn't mattered who occupied by, either sellers or buyers.
I assume you made insurance company aware that this was a new property for you? In which case, if you advised insurance company of the situation why did they recommend a policy if it wasn't actually covering you? This is literally the point of the insurance.

I'd ring insurance company a few times and get this explained in more detail.

The solictor should absolutely be advising you too.

Thank you . I have managed to raise it under Legals Matters