What happens when a property floods between exchange and completion?

Buying or selling a home in England and Wales involves several key milestones, but few are as important—or as stressful—as the period between exchange of contracts and completion. Once contracts are exchanged, the deal becomes legally binding, and both parties focus firmly on the completion date. But with flooding becoming increasingly common, many buyers ask: what happens if the property floods between exchange and completion?

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Flood risk should never come as a surprise

Before exchange, the buyer’s conveyancer will order an environmental search. This report highlights the property’s flood risk from rivers, surface water, groundwater and other sources. It usually includes a clear, colour-coded map showing whether the risk is high, medium, low or very low.

Buyers can also cross-check this information with free government online flood-risk tools, making it unlikely that a significant flood risk will go unnoticed before committing to the purchase.

See also: What happens if conveyancing completion is delayed?

Insurance must start from exchange of contracts

Under English and Welsh conveyancing law, the buyer assumes the risk for the property from the moment contracts are exchanged. This means that if the property floods or is damaged in any way between exchange and completion, the buyer:

• remains legally obliged to complete the purchase, and
• is responsible for the cost of repairs or loss.

For this reason, buyers should always put buildings insurance in place on the day of exchange. Some insurers may charge more or exclude cover for homes in high-risk flood areas, so it’s essential to shop around early. Failing to secure suitable cover could leave a buyer facing substantial financial exposure if the worst happens.

Can the buyer negotiate with the seller?

Although the law places the risk on the buyer, there is nothing preventing a buyer from discussing the issue with the seller if the flooding is severe, particularly if the property becomes uninhabitable or its value is significantly affected.

The buyer may seek:

• a reduction in the purchase price.
• a financial contribution toward repairs.
• a delay to completion by mutual agreement.

However, sellers are not obliged to accept these proposals. Any changes must be agreed voluntarily.

See also: Surface water runoff: the law

Why sellers should keep their insurance too

Even though the buyer takes on the risk at exchange, sellers are strongly advised to keep their own buildings insurance active until completion. This avoids potential disputes and provides a fallback option if liability is questioned or if the buyer’s insurance has not yet taken effect. It is a simple step that helps protect both parties.

Conclusion

If a property floods between exchange and completion in England and Wales, the legal position is clear: the risk passes to the buyer upon exchange. This makes it essential for buyers to arrange comprehensive insurance immediately and for both parties to stay in close contact with their solicitors and insurers.

Understanding your responsibilities—whether you are buying or selling—can help you navigate this unexpected situation with far greater confidence and protect your investment if flooding strikes at the worst possible moment.