Do I need a building insurance even before property goes unconditional?

You own the place when both parties sign the contract. Settlement just takes care of sorting out the payment with the appropriate adjustments and registering the change in ownership. Get out clauses allow you to cancel the contract and relinquish ownership, but you still owned it for a few days even though you couldn't do anything with it. Same as shares where the trade happens and you immediately have control of the shares and payment is due in 2 days.

 

In WA its a requirement to settle so only requested at this stage which is past the unconditional stage.

 

That's understood. You own the house pending a B and P inspection (ignoring finance for the time being).

Scenario one: Both parties sign contract. You own house. Two days later a B and P reveals a termite infestation. You walk away and no longer own the house. The termite damage is the sellers problem.

Scenario two: Both parties sign contract. You own house. Next day, a fire destroys house. Day after that, a B and P indicates "evidence of recent fire damage - that'll be $550 ".

But apparently in scenario two, you cannot walk away and rescind ownership. Not sure why.

 

I would argue that the fire occurred AFTER you signed the contact and BEFORE you rescinded the contract and so you were owner of the property for common law contract law purposes when the fire occurred. State legislation may change that situation. Just safer to have the insurance.

Rescinding due to the B&P report is about preexisting damage that you were not aware of.

 

That makes sense. In any event - its always better to be safe than sorry!

 

Hi Firefly. I’m interested to know where in law this is actually written for the various states as your attachment does not identify the original source of the info. Do you happen to have this information?
I’ve always been advised to obtain insurance once contacts are exchanged, and have always done so, but like others, it seems ridiculous that I am responsible for insuring something I do not own yet. Surely the vendors are not canceling their building insurance once contracts are exchanged?!? Should they be, if I also have a policy in place??

 

No idea sorry!