66Application of insurance money on completion of a sale or

66 Application of insurance money on completion of a sale or exchange (1) If, after the date of a contract for the sale or other exchange of property, money becomes payable under a policy of insurance maintained by the vendor in respect of damage to or destruction of property included in the contract, the money: (a) on completion of the contract, is to be held or is receivable by the vendor on behalf of; and (b) on completion of the sale or exchange, or as soon after the sale or exchange when the money is received by the vendor, is to be paid to, a person entitled to the money because of an encumbrance over or in respect of the land and, in the case of the balance remaining (if any), the purchaser. (2) For the purpose of this section, cover provided by a policy referred to in subsection (1) extends until the date of completion and money does not cease to become payable to the vendor merely because the risk has passed to the purchaser. (3) This section applies only to contracts for the sale or exchange of property made after the commencement of this Act and has effect subject to: (a) a term of a contract for the sale or exchange of property to the contrary; or (b) the payment by the purchaser of the proportionate part of the premium from the date of the contract. (4) This section applies to a sale or exchange of property by an order of court as if a reference to: (a) the vendor is a reference to the person bound by the order; Law of Property Act 2000 39 (b) the completion of the contract for the sale or exchange is a reference to the payment of the purchase or equality money (if any) into court; and (c) the date of the contract for the sale or exchange is a reference to the time when the contract becomes binding.