Selling - Open insurance claim

Citygirl1

Hi all. Interested in some views on this situation.

Property I'm selling is in a managed estate. It's sale agreed almost 5 months now, the buyer being a professional investor. The house is in pretty much perfect condition. Management company is reasonably well run, but there some issues, which we flagged when going sale agreed.

The sticking point now is an open public liability claim on the block insurance. Don't want to get into the facts, but it's clear to us that the claimant doesn't have a case and there was no negligence involved, and the injury was minor. Details have been shared with the purchaser.

But, of course, their solicitor is taking the cautious approach, and have asked for confirmation from the insurers of how much they expect to pay out. Query was raised by the management agent, followed up a number of times, with no response.

I've no idea no how long the insurer may take to respond. Wondering if anyone has been in a similar situation, and how did it pan out?

I'm thinking at the this stage of offering a few thousand reduction in price, just to close the deal, if they can move on from these queries. Any thoughts?

Fol20

When I was looking for a rental a few years ago, I came across one property with a similar issue. In my case. It was a badly run complex with an expected pending payout of circa 30k for damage on a car. It was being sold as a cash only type of deal.

When you talked to your solicitor, did he advise you if it’s possible for banks to give out mortgages with a pending legal matter?

Citygirl1

Hi. The prospective purchaser is an investor who has the cash ready to go, so no mortgage drawdown is not an issue. Though, that's an interesting point which I hadn't thought of. The actual legal claim arose since I put the property on the market. My solicitor is useless for advice.

My real question at present is how long the insurers might take to respond to the request for an estimate. Of course the answer is probably, how long is a piece of string, as there's no real onus on them to respond. Was just wondering if anyone else has been in this type of situation?

breeno

One thing to note is that insurers typically won't release the reserves on individual active claims so as to not prejudice their position in settling the claim.

Citygirl1

breeno wrote: »

One thing to note is that insurers typically won't release the reserves on individual active claims so as to not prejudice their position in settling the claim.

That's a good point. Was thinking this might be the case.

Fol20

Even if he is a cash buyer, I know I would leverage this to get a reduction on purchase price as it can limit his capital appreciation/prospective buyers if he decided to sell.

Citygirl1

Fol20 wrote: »

Even if he is a cash buyer, I know I would leverage this to get a reduction on purchase price as it can limit his capital appreciation/prospective buyers if he decided to sell.

Oh yes, I understand. I think their main concern now is the possibility of increase in the management charge. I'm considering talking to the estate agent about offering a few thousand reduction, as holding the property is costing me money.

Fol20

Citygirl1 wrote: »

Oh yes, I understand. I think their main concern now is the possibility of increase in the management charge. I'm considering talking to the estate agent about offering a few thousand reduction, as holding the property is costing me money.

Way up the amount it is costing you vs the reduction your considering.

Its a tough one to do as if you reduce the cost without them asking, it might also put more worries in the buyers mind as to why they are so willing to reduce when you talk about management fees. Its a double edged sword so just be careful .