House Burnt Down Day Before Settlement

Client of mine was due to settle on a house today. House Burnt Down the day before.

Good reminder as to why insurance is important straight away.

In QLD Standard Form Contracts the risk passes to the Buyer a business day after the Contact Date.

In the event the dwelling is damaged but habitable then the Buyer still needs to settle.

In the event that the dwelling is not habitable then there is a statutory provision allowing you to terminate. The important thing to note with that is that you still need to claim on your insurance, it is just that the Seller gets the money, not you. You will need to pay the excess etc.

 

This is a buyers worst nightmare no doubt. Sifting through such an insurance claim is never going to be easy and fast.

 

eesh

Remember to get your insurance setup guys, straight after contract.

 

Did they have insurance?

 

Yes sure did

 

so would you get insurance when the contract goes unconditional or days before settlement? this is pretty freaky.

 

We advise our purchasers to take out house insurance just after cooling off period as a precaution and I guess this here is the precaution.

 

Read the first post. You need it as soon as you sign the contract.
Marg

 

Thanks. I missed that bit. I panicked when i see the words "house burnt down". @Xenia yes, i agree.

 

whoa.

At least it was empty (one would presume) .

House fire. Let me guess... Logan?

No Cookies | The Courier-Mail

 

How about a townhouse or strata titled unit ? Do I need to contact anyone to change the building insurance to my name ? Just got a TH but not settled yet. Fingers crossed !

 

Queenslanders, you're a strange lot. Able to pass the risk to the purchaser before settlement.

A little more straightforward elsewhere - you don't have an insurable interest until your name's on title.

 

I've been putting a clause in my contracts that over rides the QLD standard T&C's, that the property remains at risk to the vendor until such time as settlement is effective.

 

Burned down a day before settlement! Suspicious much

 

What if the Buyer still wants to go through with the purchase but claim on the insurance?
Can the insurance company build the buyer a new house or payout the buyer the amount insured?
Even if the dwelling is no longer habitable or indeed no longer even there? Burnt to the ground, burnt to a cinder, gone kaput!

 

Surprised the vendor would accept that.
Be interested to see the outcome if it was ever tested. It might be ruled invalid if it goes against the Act (just because someone signs something doesn't mean you can contravene what the legislation says).

Not really necessary though - just organise insurance from day dot.

 

Mumbai, I'm sorry to hear out about your fire. Shh Ed, it's tomorrow.

 

There's no legislation that states otherwise. My solicitor is the one who brought it to my attention and advised to do so. I'm aware of other solicitors advising the same.

Its done to CYA for the very reason provided in OP to keep the risk & claims onus back on the vendor .

 

The vendor has, or should have insurance anyway so no big deal for them. If you are buying an old property then you may be better to leave as is, in the unlikely event it burns down you get a vacant block and a chq big enough to build new or you could re sell straight away vacant and come out ahead.

 

Buyer can choose to settle and insurer pays them. In lot of circumstances the buyer will be better off settling- vacant lot and chq for new build should = significantly more than purchase price