Exchange and settlement

[cimbom]

Hello,

Just wondering who is entitled to rental income that is accrued after exchange but before settlement?

Thanks

 

[ShellTee]

Seller.

Buyer does not own the house until settlement, therefore is not entitled to rental income.

 

[Peter_Tersteeg]

Until settlement, the seller owns the property. That comes with all the benefits of income, as well as all the costs like rates & insurance.

 

[seabreeeze_99]

Hi, so if this is right and the seller owns the property until settlement, why did I have to get insurance coverage on the property I was purchasing in Petrie, Brisbane before settlement??

Thanks heaps,

Seabreeze

 

[Aaron_C]

Hi, so if this is right and the seller owns the property until settlement, why did I have to get insurance coverage on the property I was purchasing in Petrie, Brisbane before settlement??

Thanks heaps,

Seabreeze

because...if the property burned to the ground just prior to settlement, and you didn't have insurance (but the vendor did), you would not be able to force them to claim on the insurance for your benefit due to the privity of contract. So all you end up with is a burnt out property which is worth a lot less than what you paid, without compensation.