Question - out of the blue

[aussierogue]

You buy a house with 30 days settlement. 10 days to go accidental fire burns down the house. What happens to the sale? Gutted.

House was vacant. Seller had moved out and now living in sweden.

Dont worry im not consdering an insurance job or trying to get out of a purchase. Just got me thinking.

 

[boods99]

You buy a house with 30 days settlement. 10 days to go accidental fire burns down the house. What happens to the sale? Gutted.

House was vacant. Seller had moved out and now living in sweden.

Dont worry im not consdering an insurance job or trying to get out of a purchase. Just got me thinking.

At the pre-handover inspection, you can point out to them that there is a slight burning smell coming from the property and you wont be settling until it is rectified...

No, seriously, depending on the state that you are in, you may be required to complete if the contract is unconditional. This is why it is prudent to take out an insurance policy as soon as the contract is unconditional (in some states)
There was a thread not too long ago on here that this had actuallyhappened to...can't remember who it was, but a search will bring it up.

here it is...

http://www.somersoft.com/forums/showthread.php?t=47904&highlight=burnt

Boods

 

[Luv2Travel]

So if a contract is unconditional, what is the purpose of the final inspection a few days before settlement? What's the difference between say, the walls have holes in them which weren't there when the offer was made, and the walls are now completely burnt down? Isn't it to make sure it's in the same condition as you first inspected... obviously if those bricks are now ashes, then it's not.

I'm not disputing you, I know it is the case that you should have insurance for this exact reason, I'm just questioning it from a legal point of view, how it being burnt down is any different to it just not being in the same condition? Seems absurd to me that the new owner could be responsible for it before settlement, they don't own it and have no control over it, but as soon as it goes bad, the responsibility is/can be the purchasers?

 

[boods99]

So if a contract is unconditional, what is the purpose of the final inspection a few days before settlement? What's the difference between say, the walls have holes in them which weren't there when the offer was made, and the walls are now completely burnt down? Isn't it to make sure it's in the same condition as you first inspected... obviously if those bricks are now ashes, then it's not.

I'm not disputing you, I know it is the case that you should have insurance for this exact reason, I'm just questioning it from a legal point of view, how it being burnt down is any different to it just not being in the same condition? Seems absurd to me that the new owner could be responsible for it before settlement, they don't own it and have no control over it, but as soon as it goes bad, the responsibility is/can be the purchasers?

The confusion lies in the wording of the different contracts of sale that are used from state to state, as well as the individual state's legislation that covers real estate transactions.
Over here in WA, it is almost unheard of to insure the property until settlement, however, through reading various threads here, it is evident that this is not necessarily the case over east.

Boods

 

[aussierogue]

thanks for the link - interesting stuff!

 

[alexlee]

I know that in NSW, significant damage to a property has to be rectified by the seller prior to settlement even if the contract is unconditional. A house was under contract but the roof was damaged by hail. The property didn't settle until the seller replaced the roof at their expense.
Alex

 

[Rixter]

I put a clause in all my contracts that state "the property remains the full responsibility of the vendor until such time as settlement is effective".

Puts it all back on to the vendor.

 

[Luv2Travel]

I put a clause in all my contracts that state "the property remains the full responsibility of the vendor until such time as settlement is effective".

Puts it all back on to the vendor.

Is that enforceable though? If each state is different, is there some sort of state law, can you really over ride that? I like your idea, but just because you put that, does it mean it's binding? Think I'd still be too scared to go without insurance... although I notice you're from WA also, in which case apparently it's pretty much unheard of for the purchaser to have to get insurance prior to settlement. I'm in Victoria, and it's the only way I know, in fact the bank has always wanted me to have insurance prior to settlement.

 

[boods99]

Is that enforceable though? If each state is different, is there some sort of state law, can you really over ride that? I like your idea, but just because you put that, does it mean it's binding? Think I'd still be too scared to go without insurance... although I notice you're from WA also, in which case apparently it's pretty much unheard of for the purchaser to have to get insurance prior to settlement. I'm in Victoria, and it's the only way I know, in fact the bank has always wanted me to have insurance prior to settlement.

Yeah, over here the bank will want to see an insurance certificate of currency effective as of, or before, the settlement date.

Answering your question about how binding your added clauses are, you can add whatever clause you wish, however, you can't contract out of law. So if the appropriate legislation has provisions that conflict with your added clause, it will become ineffective and non-binding.

 

[Token Funder]

*usual caveats about not being a property lawyer*

As a general proposition, a contract for the sale of land require the vendor to hand over the property in substnatially the same condition as it was on of the day of sale, subject to reasonable/ordinary wear and tear. An oft-quoted example is when the a/c or, say, a pool filtration system were to burn out between signing the contracts and settlement. In the jursidactions I am familair with, unless same was the result of negligence on the part of the vendor, it would be put down to wear and tear and it would not be the vendor's responsibility to remedy it prior to settlement.

It goes without saying that a pile of ashes and twisted metal would not consitute wear and tear.

As an aside, if a pool pump motor burnt out in that period, it was less than the maximum age under the insurance poilicy you took out as a prudent buyer, you could claim on your own insurance.

 

[PI141]

Wow I would be over the moon as it was probably a very run down property ( usually what I would buy ) and it would be insured for a new house to be built - take the money and run!

 

[Rixter]

Is that enforceable though? If each state is different, is there some sort of state law, can you really over ride that? I like your idea, but just because you put that, does it mean it's binding? Think I'd still be too scared to go without insurance... although I notice you're from WA also, in which case apparently it's pretty much unheard of for the purchaser to have to get insurance prior to settlement. I'm in Victoria, and it's the only way I know, in fact the bank has always wanted me to have insurance prior to settlement.

I use this clause in Qld & WA.

 

[HandyAndy888]

I'd be jumping up and down with getting a new house for nothing!!!

 

[yadreamin]

I put a clause in all my contracts that state "the property remains the full responsibility of the vendor until such time as settlement is effective".

Puts it all back on to the vendor.

Once again nice work Rixter

 

[WinstonWolfe]

I put a clause in all my contracts that state "the property remains the full responsibility of the vendor until such time as settlement is effective".

Rixter, can you share the exact clause recommended by a Queensland solicitor?

 

[Rixter]

Rixter, can you share the exact clause recommended by a Queensland solicitor?

The property with at the risk of the seller until settlement.