Liability between exchange of contracts and closing of sale?

Godfather

Registered User
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Hello,

I'm hoping to buy my own place soon (going through the paperwork now). I have a query I'm hoping someone is able to shed some light on please.

My insurance company told me that they can insure my place from the moment I move in, basically when I get the keys.

But my solicitor is telling me that I'm responsible for my place in the moment of signature of the contract (more technically speaking the "contracts exchange moment").

But between the contract-exchange moment and the key-handling days can pass so I'm asking my solicitor if I could agree the 2 dates to be as close as possible.

But fingers crossed... What if something happens between the exchange of contracts day and the key handling day? Is it full responsibility of the buyer even if the same buyer cannot be fully insured yet?

Thank you.

G.
 
1. You should get the keys the day you close the purchase. There should be no delay.
2. Have you not got an insurable interest once the seller signs the contract after you pay the deposit?
 
But my solicitor is telling me that I'm responsible for my place in the moment of signature of the contract (more technically speaking the "contracts exchange moment").

This surprises me. You should get a second opinion.

You don't own the property and you have no control over it until the sale is closed and you get the keys. This ties in with what your insurance company is telling you.

If the house is burgled before you get the keys, I doubt you have any liability to the sellers.

If you move into the house and find that it has been damaged, the sellers would have a liability to fix it or compensate you.
 
But my solicitor is telling me that I'm responsible for my place in the moment of signature of the contract (more technically speaking the "contracts exchange moment").

But between the contract-exchange moment and the key-handling days can pass so I'm asking my solicitor if I could agree the 2 dates to be as close as possible.

Sounds strange to me,

Sellers solicitor issues contracts unsigned, the buyer signs first, contracts are then sent back to seller’s solicitor, it might be days, weeks or even months in the case of a new build before seller signs and returns contracts. At that point both parties are contractually obliged to complete the sale on a specified future date which is usually weeks or can be months away, but buyer does not own the property until that date when payment is made in full, keys are usually then handed over, any time I ever bought, this happened on the same day.

I think the closing date specified in the contract when full payment is made is the date you need to insure the property from.
 
Once you have exchanged contracts the sale is binding and you have to proceedd - even if the hous eburns down. QUOTE]

Are you sure about that, I have never had that problem but would be surprised if there was not a get out clause in standard contracts that deals with such situations.
 
I've exchanged contracts on a house sale, house had a rock thrown through the window last week. I didn't even question the fact that I had to get it fixed as the keys haven't handed over and the sale is not closed. just ponied up and got a glazier out..
 
I've exchanged contracts on a house sale, house had a rock thrown through the window last week. I didn't even question the fact that I had to get it fixed as the keys haven't handed over and the sale is not closed. just ponied up and got a glazier out..

You did the right thing, because if you didn't the purchaser might start delaying etc.

Sahd is giving the correct legal position. The buyer has to cover himself in case the seller cancels his house insurance.

This is about where you have that one in a million chance of the seller having no insurance, the house burning down etc.
 
My bank wouldnt release the funds for the house to the solicitor untill i had insurance in place. I didnt need it from the contract signing and my solicitor didnt mention it and she is very thorough. So i put home insurance in place from 2 weeks before the closing date.
 
I have never considered it necessary or been advised by my solicitor or lender to have insurance in place on a property that I was contracted to buy but did not yet own, of course I need cover once I own it and my lender will not release funds until I have cover in place from when I own it. I have always had cover in place from the closing date on the contract when full payment is made, in the belief that is when I own the property.

Scenario;, contracts signed by both parties with a closing date in 4 weeks, house burns down next week, totally gutted, roof gone, four walls standing, everything else destroyed, the opinion here is I am obliged to complete the sale, I’m stunned, I will have to consider this if I ever buy again, while such an event is unlikely, I suppose it does happen.

Some thoughts on this;

What about the argument; I agreed to buy a house with a roof, bathroom, kitchen, floors, doors, windows etc, what is now been offered is just four walls, surely the seller is not providing what I agreed to buy, would this not invalidate the contract, if that is what I wanted to do ?

Will my lender hand over the funds to finance the purchase of a house that was valued last week at €300K, but is only worth €100K today ?
 
I have an interesting conundrum here.
We went sale agreed on a house in June. We issued contracts in early July. The buyers signed the contracts and returned eventually in August. They dithered and dallied on closing date. It then transpired that their financing fell through (after they had signed contracts!).
At this stage we could have served completion notice on them, but we gave them more time to get finance from another bank, which they did eventualy get.
The house is vacant and in west Dublin. Despite our best efforts (driving up every evening to check on the property), there was a break in 10 days agao with minor damage (carpet burns). A window was cracked also

Met with buyer at the house as they were measuring for windows. So turns out they are replacing carpet and windows in any event, so my understanding was that there was no issue.

Got a call yesterday from my solr that they are looking for a cash payment in compensation for the damage! They have already drawn down their mortgage from the bank.

To me, this is simply a shakedown as they have no intention of repairing the carpet or window.

What do you think?

My instinct when their finance fell through was to put the property back on the market, sorry I didn't do so now.

My solicitor has advised that he will issue a completion notice to enforce the contract
 
My solicitor advised me to take out insurance on a house I was purchasing as soon as I signed the contract.
 
I have an interesting conundrum here.
We went sale agreed on a house in June. We issued contracts in early July. The buyers signed the contracts and returned eventually in August. They dithered and dallied on closing date. It then transpired that their financing fell through (after they had signed contracts!).
At this stage we could have served completion notice on them, but we gave them more time to get finance from another bank, which they did eventualy get.
The house is vacant and in west Dublin. Despite our best efforts (driving up every evening to check on the property), there was a break in 10 days agao with minor damage (carpet burns). A window was cracked also

Met with buyer at the house as they were measuring for windows. So turns out they are replacing carpet and windows in any event, so my understanding was that there was no issue.

Got a call yesterday from my solr that they are looking for a cash payment in compensation for the damage! They have already drawn down their mortgage from the bank.

To me, this is simply a shakedown as they have no intention of repairing the carpet or window.

What do you think?

My instinct when their finance fell through was to put the property back on the market, sorry I didn't do so now.

My solicitor has advised that he will issue a completion notice to enforce the contract

That is awful carry on Amgd28 in light of the fact you were so accommodating in relation to them having financing problems. But you have to step back, you are nearly there, a window and carpet is nothing.

They are just chancing their arm. You have to decide whether this is worth saying no to. What exactly can they do. Alternatively, what is more important, getting it over the line, or paying out a few bucks. Cool heads now.
 
If the house was vacant why could you not complete?

If anything your solicitor should not transfer the full sale price but be holding back funds for the repairs
 
Peno - I am the vendor.
The buyer could not complete because they lost their mortgage (even though they had signed contracts). We accommodated them in giving them a chance to get a new mortgage rather than putting the house back up for sale.
The buyer has drawn down their mortgage. The "damage" is immaterial as all is being replaced in any event and had agreed same with buyer.
This simply a ruse by the buyer to extract a few quid.

With respect, please read previous posts before commenting.
 
If the house was vacant why could you not complete?

If anything your solicitor should not transfer the full sale price but be holding back funds for the repairs

So.. is this your legal advice? Contracts are signed with sale price stated. They are obliged to complete, regardless of condition.
 
Apologies - misread this thought you were the buyer and the vendor refused to complete.
Simple mistake.
 
Just to clarify - the buyer had drawn down their mortgage and it was in my solicitor's trust account when they made the demand for 1k in cash to close things out.
Bronte - my instinct was to hold tough for a couple of weeks and if push came to shove to replace the window and carpet (knowing they were replacing anyway and that they wanted the cash).
However the house involved has been a money-pit for us and my wife was getting unbelievably stressed about it, so I bit my tongue and paid 500 euro to close this out.
It sticks in my craw, but at least it is all closed out now and my wife is sleeping better.
 
Well done Amgd on your decision. 500 Euro is nothing, and to give you peace of mind, these kind of things have Karma in my view of life, so don't ever regret it.

Well done on getting your sale.
 
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