What we are all warned about

[Elliotte]

...property burning down before settlement!!! Make sure you have insurance!

http://smh.domain.com.au/real-estat...on-sells-then-burns-down-20141017-117k8i.html

 

[DaveM]

I always insure from date of exchange

 

[fokas]

What a shame for the buyers! Seems like they really loved the house.

 

[lizzie]

So sad - was a beautiful building ... however ... why take out insurance before settlement is due when, if the property is destroyed, the contract is null and void due to the vendors not being able to supply the property in the same condition as at time of exchange?

 

[wylie]

So sad - was a beautiful building ... however ... why take out insurance before settlement is due when, if the property is destroyed, the contract is null and void due to the vendors not being able to supply the property in the same condition as at time of exchange?

I don't think it is that simple Lizzie. I've heard of people having to settle on a house even after it has been destroyed. Perhaps the rules differ in different states? I know in Queensland it has always been that you take our insurance by 5pm the next business day after signing a contract. I don't know who checks that it has been done, but I do know that if a bank is involved, settlement will not go ahead without a copy of the insurance contract (at least in my buying experience).

 

[Perp]

So sad - was a beautiful building ... however ... why take out insurance before settlement is due when, if the property is destroyed, the contract is null and void due to the vendors not being able to supply the property in the same condition as at time of exchange?

The contract's not necessarily null and void; the purchasers have the option to withdraw.

Perhaps the rules differ in different states?

Absolutely right, it differs between states and in Queensland such a buyer would be obligated to proceed.

You have to know what rules you're operating under, for sure, or it could be catastrophic.

 

[WattleIdo]

Previously bought for 5.4, this time bought for 4.5. Plus they'd been trying to buy it the whole time. Very sus.

 

[Nem]

So what are the rules in NSW?? I understood that bank wont proceed without insurance yes, but insurance to be valid only from settlement date as house needs to be in the same condition as when contacts are exchanged or I'm mistaken??

 

[Perp]

So what are the rules in NSW?? I understood that bank wont proceed without insurance yes, but insurance to be valid only from settlement date as house needs to be in the same condition as when contacts are exchanged or I'm mistaken??

Yes, in NSW I believe you can withdraw. In Queensland, you can't. Not sure about other states.

 

[Scott No Mates]

FWIW, in NSW you don't have an insurable interest in the property until settlement ie when your name goes on title. What is the insurer going to insure on your behalf? your deposit? A caveat is only as good as the money you've put down - in this case, you would be well advised not to release the deposit to the vendors.