Strictly hypothetical. Just got me thinking last night In nsw it's the vendors responsibility until settlement occurs. So if you have a unconditional contract and before settlement the house burns down. Obviously insurance will cover but what happens at settlement? Does the buyer buy a burnt down house for contract price and insurance does the rest? What happens on settlement the house has been damaged or vandalised but both parties are not aware and settlement takes place.
Don't laugh, this happened a few months back in Lane Cove. Linky It had been sold weeks before. Linky
I had the experience in WA where the hosue was flooded by break in, as water Corp told my legal just a day before settlement, lucky I got away because the contract said its seller responsibility
And yet solicitors all advise that the buyer should also insure after exchange of contracts along with vendors maintaining insurance until settlement. Double dipping by insurance companies. There should be a clear guide as to who is responsible after exchange.
Anyone remember this one? Family home destroyed in Kurnell hours after selling at auction What was the outcome of it?
Is there a legal clause that allows them to pull out. If there is it must be quite specific. Or people could pull out if a windows was broken
I was advised that I didn't need insurance if the vendor was insured. However, the amount of money for the premium was so small, I insured before settlement anyway just in case...
You can't insure a house you don't own in Western Australia. I have tried after exchange of contracts and all the insurance companies I contacted said "no", sellers responsibility. Actually, settlement is usually at 12 and insurance doesn't kick in until 4, so there are 4 hours where the buyer is potentially exposed. Next time I will ask them to start insurance 4 pm on the day before settlement. 4 hours is a very small but a very real risk.
You would have to read the contract. In WA with the standard REIWA contract, there are contingencies for if the house is not kn the same condition as inspected.
So in the case of an event. Who pays? I wouldn't want to double insure so the insurance companies can shift the responsibility to the other. Another headache in what is already a eventful process
I heard you take insurance after exchange of contracts in WA as you have an insurable interest in the property. I have never tried it though.
Looked it up s 66I CONVEYANCING ACT 1919 - SECT 66L Power to rescind contract where land substantially damaged
