Whether you are buying a home in Belfast, Newry, Ballymena, Antrim, or Armagh, it is always an exciting milestone, but it also comes with risks that many people don’t think about. One of the most important, yet overlooked, stages in the process is the gap between exchange of contracts and completion. This is a short window of time, but if something goes wrong and you don’t have property insurance in place the financial consequences can be serious as our Belfast Property Solicitors explain in the following article.
The Risk Between Exchange and Completion
In Northern Ireland, the standard contract for sale provides that the seller (vendor) carries the risk in the property until completion. On paper, this means that if the property is damaged in that period – for example, by fire, flooding or structural damage – the seller is expected to hand it over in the same condition it was in at the date of the last inspection or the date the contract was signed (other than fair wear and tear).
However, there’s an important catch: the seller does not have to insure the property. If they don’t have cover, or their insurance doesn’t fully protect against the damage, you as the buyer may be left in a very difficult position. This risk applies whether you’re buying a home in Strangford or Seaview.
What the Contract Actually Says
The standard contract sets out the position clearly:
- Clauses 6.1–6.3: The vendor must deliver the property in the same condition as at the last inspection or contract date. If the property becomes unusable, either party may rescind the contract or proceed with compensation, limited to the cost of repairs.
- Clause 6.4: The vendor has no duty to insure the property.
- Clauses 6.5–6.6: If damage occurs that doesn’t justify ending the contract, the purchaser may claim compensation, but must notify the vendor within 10 working days of completion.
These clauses provide some protection, but they are not watertight. If the seller doesn’t have the money to cover repairs, or if the damage falls outside the contract’s scope, you could be left with limited remedies.
What About Your Mortgage?
Most mortgage lenders insist that the buyer puts buildings insurance in place from the date of exchange. If you fail to arrange cover at this point, you may be in breach of your mortgage conditions, regardless of what the contract says.
Northern Ireland continues to outpace all other UK regions with remarkable annual house price growth of 9.3%. The typical home in the province now costs £214,832, representing exceptional value compared to other parts of the UK. It is a significant investment. That’s why our Belfast based property solicitors recommend that buyers arrange their own insurance as soon as contracts are exchanged.
Why Lacey Solicitors Property Lawyers Recommend Insurance at Exchange
Our advice is straightforward: take out buildings insurance the moment contracts are exchanged.
While the contract says the risk rests with the seller until completion, that doesn’t guarantee you’ll be fully protected if something goes wrong. Lacey Solicitors are an all-island insurance and property firm and we are best placed to advise on the issue. Having your own policy in place means you don’t have to rely on the seller’s finances or their insurance cover. It’s a relatively small cost for a great deal of peace of mind, especially when you’re investing in one of the biggest purchases of your life.
Talk to Our Property Solicitors in Belfast
William Wilson, our head of property can guide you through the entire conveyancing process. We’ll make sure you understand your rights and responsibilities, and help you protect your new home with the right insurance at the right time.
Get in touch with us today using our online portal to speak to one of our property and insurance law specialists.
