Family of Brighton, who bought houses that were flooded leak just before they completed the purchase of warning others to make sure they buy insurance on the exchange, after they were effectively forced to buy the house, which was destroyed.
James and Daisy Callahan, who has two-year-old child, faces a £50,000 bill for repairs and to cover rent replacement home within six months.
The pair were incredibly lucky – the water froze and cracked in the attic in extreme cold in January. Unfortunately, they have already exchanged but not yet completed and the owners were out of town, so no one noticed the flood.
“Exchange” is the name of the point where buyers exchange contracts, agreed to by the house, and the buyer pays a Deposit of 10% of the cost. It is legally binding, and You can’t back out without losing the Deposit. But You don’t get the keys from the property before completion, which is usually after two or three weeks.
In Callahans crazy because they say their transfer agent directly to tell them that they need to insure the house in Brighton after they have exchanged contracts. Requirements, they believe, was buried in a 40-page document they were sent by email and invited to sign.
The lid, which would have saved them it would only cost about £50, say suppliers.
2012 standard law society contract for the transfer of ownership will require the purchaser to insure the buildings on the exchange, but insurers warn that the industry is only now beginning to understand this requirement.
The couple has already sold the apartment to Fund the purchase of housing, and they lived with relatives until they could not move. Everything is going well, when James received a fateful phone call, saying that water was flooding out of the house.
“This whole episode was a nightmare, not ours, and I want to publish this question to make sure that no one else has to go through this experience. Leaving aside the huge amount of money that we’ve lost, dealing with the consequences of that has taken over our lives,” says James.
He says that when it became clear the house was torn down, they are faced with the impossible choice of whether to out – lost £50,000 Deposit or to do.
“Our lawyer told us that if we don’t get out, we can also be responsible for all circuit, to claim any loss and damage. It could have potentially made a huge amount of money, so we felt we had no choice but to go forward,” he says.
The home seller offered to pass on the right to make a claim through their insurance, but he says that after he found out he probably only pay about half of the £50,000 to restore the value.
Most of the plaster should be removed and the house rebuilt internally.
“The loss Adjuster is playing hardball, and I feel that I have little leverage, since I’m not insured. The policy will not pay for us to rent a replacement place for us to live, or any of our other expenses, for the same reason – as we have no policy,” says James.
He says that the meeting with his lawyer, McMillan Williams, at one point, he was counting on the fact that the requirements on insurance, it was noted, did not happen, as the notary did not turn up. Instead they were just sent a lengthy preliminary exchange of documents.
McMillan Williams has denied responsibility, claiming that the requirement for insurance set out in the documents they signed. Since then, he has offered them £250 in full and final settlement, which they rejected.
The firm said the money guardian, he suggested a few independent consideration of the case, and that he could not comment on how their complaint was ongoing.
Colin Bickers specialist Exchange2completion the insurer says the industry is only now beginning to this issue.
“Overall, too few people are aware of the need to insure – among notaries in real estate transactions and insurance,” he says.
“The problem is that very few standard buildings policy will cover the period from exchange to completion because the owner lives in the house that they insure is as low as 20% of the policy.”
Bikers, says he’s taken his company two years to convince the insurers that you need to offer this cover. His insurance was only available to the public in October last year, and he is not aware that any claims have been made. He says that cover generally costs between £50 and £100 depending on the building and the length of coverage.
Meanwhile, the Callahans now face trying to recover their losses from the lawyer.
“We all talk about it can’t believe it, and the majority thinks it could be them,” says James. “For people who recently bought about half say they said they need cover in exchange, but the rest was in the dark as we are. It can’t be true.”