If you buy a house, who owns it between exchanging contracts and completion (that’s when you get the keys)?
Imagine you picked up the keys to your property (on completion) only to find someone had broken in, trashed the place and stolen the radiators, copper piping, etc. causing a leak!
You do not legally own a property until completion (this is when the rights of ownership are formally transferred or conveyed to you the purchaser). When contracts are exchanged, the parties are legally committed and the completion date is fixed.
It should be noted though that responsibility for the property is typically transferred to the buyer from the date of exchange of contracts, since this is presumed to be a binding commitment to proceed to completion. It is for this reason that the purchaser is best advised to make certain that buildings insurance cover starts from the date of exchange of contracts.
However, for new build properties it is usual for the developer to maintain the insurance up to the date of completion; so in this instant you only need to insure the property from the completion date.
Should the situation above arise the purchaser would still be expected to complete and would have to progress a claim with their insurance company. In practice though, the seller is unlikely to have cancelled their buildings insurance and so all parties would likely need to submit joint claims and it's probable that the insurers would settle the liability between them.
Unfortunately, if you do not arrange buildings insurance cover effective as from exchange of contracts and the damage to the property occurred after exchange, subject to checking the seller's buildings insurance cover, the purchaser may well have no option but to dig into their pocket to pay for works needed to rectify the damage.
Please note The Will Centre does not offer a conveyancing service but we can recommend someone who does.
2. What qualifies for Business Relief
- a business or interest in a business
- shares in an unlisted company
You can get 50% Business Relief on:
- shares controlling more than 50% of the voting rights in a listed company
- land, buildings or machinery owned by the deceased and used in a business they were a partner in or controlled
- land, buildings or machinery used in the business and held in a trust that it has the right to benefit from
You can only get relief if the deceased owned the business or asset for at least 2 years before they died.
What doesn’t qualify for Business Relief
You can’t claim Business Relief if the company:- mainly deals with securities, stocks or shares, land or buildings, or in making or holding investments
- is a not-for-profit organisation
- is being sold, unless the sale is to a company that will carry on the business and the estate will be paid mainly in shares of that company
- is being wound up, unless this is part of a process to allow the business of the company to carry on
You can’t claim Business Relief on an asset if it:
- also qualifies for Agricultural Relief
- wasn’t used mainly for business in the 2 years before it was either passed on as a gift or as part of the will
- isn’t needed for future use in the business
If part of a non-qualifying asset is used in the business, that part might qualify for Business Relief.
Example If you use one room in a building as a shop and the other rooms are used as your home, the shop will qualify for Business Relief but the rooms won’t.