New investor in Qld - Insurance queries

[herewego]

Hi there,
I've just got the signed sale contract back from the vendor and now I have 24hrs to arrange my insurance on this, my first, IP. This is the rule in Qld according to my solicitor.

My query is this, if I get this insurance and then the sale falls thru due to building or pest inspection problems or the bank deciding that the house is overpriced will i be able to cancel the insurance and get my money back? I'll talk to the solicitor tomorrow but what do people know about this situation in Qld???

Thanks

 

[Pa1nter]

Wait until your contract becomes unconditional ,it is only then you need to organize insurance,

Just organize the insurance over the phone,tell them to send it in the mail and you can pay for it by their required date,

Others please correct me if I am wrong?

 

[Perp]

I've just got the signed sale contract back from the vendor and now I have 24hrs to arrange my insurance on this, my first, IP. This is the rule in Qld according to my solicitor.

That's correct. In Queensland, the property is at the buyer's risk from 5pm the day after contract signature.

My query is this, if I get this insurance and then the sale falls thru due to building or pest inspection problems or the bank deciding that the house is overpriced will i be able to cancel the insurance and get my money back?

You can usually get a "cover note" and you have 21 days or so to pay. By that time, you should know whether you want to maintain it or not.

Others please correct me if I am wrong?

Sorry, you're wrong! It's a QLD quirk. The buyer absolutely must get insurance.

It is a bit silly, and that's why I always add a special condition saying that the property remains at the seller's risk until settlement.

 

[joanmc]

Yep, what Perp said. have to get it asap. We usually get the cover note and pay when we are sure.

 

[herewego]

Thanks for that. Wish I'd known b4 and I would have added the clause to the contract also. There's always next IP#2!

 

[Andrew_A]

Perp is correct, should get insurance straight away and you will get a refund if the contract is cancelled.

 

[Fudge]

It is a bit silly, and that's why I always add a special condition saying that the property remains at the seller's risk until settlement.

Thats a great idea.

I have heard stories regarding a house burning down just a week prior to settlement.

As both parties (seller and buyer) had interests in the property, the insurance company of the seller was trying to push ownership (or responsibility) onto the buyer, as he didn't have insurance yet, because it wasn't his property....yet.

I think it eventually went down to the sellers insurance company to pay for, but it was a long winded drawn out affair.

(Also, I think this was in NSW and not in QLD, and know the laws may be different down there)

By having a clause in the contract to that effect above by Perp, is very simple to understand, and is obviously binding.

In Qld, I vouch for what Perp and others have said. Do it from the contract date, and all up, you will be out of packet maybe $30. (from contract signing to settlement)

F

 

[Peterw]

Yes, it does seem a silly thing to do, however I do believe it is some thing that we inherited from our Westminister system. Apart from the Act that governs agency, there other Acts that govern the transfer of property. In Qld and it may be similar in all states, we have the Land Sales Act, as well as the Property Law Act. In one of them, it covers the situation between date of contract and date of settlement. When you look at a contract, it details the description of the land, ie lot x on plan etc, and very little description of the improvements. Upon signing, the buyer has an equitable interest in the property, and the seller does not warrant the adequacy or otherwise of the insurance they have. The Act also makes reference that if between date of contract and settlement, the improvements as so damaged so as no longer to be habitable, then the buyer can withdraw. Now, "no longer to be habitable" in whose eyes .... that is so open to differing opinions, I guess that is why the courts are full. Not sure if leaving risk with the seller totally gives you protection, I dont recall coming across a case that would give the answer. As always, the law is not necessarily logical.

 

[Perp]

I have heard stories regarding a house burning down just a week prior to settlement.

As both parties (seller and buyer) had interests in the property, the insurance company of the seller was trying to push ownership (or responsibility) onto the buyer, as he didn't have insurance yet, because it wasn't his property....yet.

One thing that many people don't think of is that you really need contents insurance from contract date, too, to cover the carpet, air conditioners (possibly), window treatments, etc, in case of fire. If the previous occupants are still living there and there's contents insurance still in place, you might be OK, but it's particularly important to have it if the property you're buying is empty, as many owners are likely to have cancelled contents insurance if they've already moved out.