HAVE YOU BEEN ASKED FOR AN INDEMNITY POLICY?
Beware The Indemnity …
More and more sales are being blighted by last-minute haggling over insurance policies to protect the buyer – so what do you do if you’re asked to pay for one? Read on:
You’re selling property so you’ve done your homework, you’ve been careful about selecting an estate agent, you’ve pinned your removal firm down to a quote in writing, and you’re happy with your solicitor.
The deal seems to be progressing but then, from left field, your buyer’s solicitor demands documentation for aspects or modifications made to your house which may have been completed even before you owned it.
The Paper Chase
They may relate to the installation of the double glazing; the construction of the conservatory; the cavity wall or loft conversion.
Sometimes – if you’ve been thorough or conscientious – you’ll be able to produce them. However, on many occasions, those documents will be long gone – and that’s when a vendor can suddenly find themselves confronted by an unexpected and sometimes considerable expense.
Without the documentation, your buyer’s solicitor may request that you pay for an indemnity policy which will cover their client should there be problems in the future, and that can cost several hundred pounds.
Indignation is a perfectly understandable reaction but many will still pay, fearing not doing so could scupper their deal.
The Claim Game
But, in our experience, if you’re asked to cough up to cover an indemnity policy, your best bet might be to ask for legal advice from your own solicitor – or even independently – to establish the likelihood of any claim being made in future.
It’s true we live in an increasingly litigious society these days and, if you’ve been bickering with a neighbour for years about the height of your extension or new windows which now overlook their garden, it’s possible they may use your sale as an opportunity to up the ante.
But, if the documents requested only relate to double glazing or cavity wall insulation, it’s worth weighing up whether a dispute is ever likely to occur and, if so, would it be likely to need settling in court?
Your next step is probably going to be finely judged. Naturally, you don’t want to put your sale at risk – but are you prepared to pay several hundred pounds for an indemnity policy your buyer may never need.
Take your time; think it over – but hopefully being forewarned will mean you’re forearmed.
For more advice on buying and selling property, why not browse earlier blogs? Alternatively, feel free to drop us a line or give us a call. We’d be happy to help if we can.