Responsibility prior to settlement

May I know who is responsible for the house before settlement, buyer or seller, as I was going to settle a house yest but it was vandalised so settlement was called off, the house is in wa? From my past purchases I had different advices from legal, some said buyer while some said seller, does anyone know?

 

Read your contract.

NSW is seller, but I always get insurance once I have an interest.

If the seller had possession, it is going to be pretty hard to think you will wear it unless it is in the contract, if it is only minor and a few grand, you could settle and just retain some funds till it is sorted.

 

If you buy Housing Commission stuff in NSW they put in the contract that you are buying the house AS IS. So if it gets vandalised in the meantime tough. But in practice they do make compensations. We bought one with a new hot water system so we stole it until settlement as we knew it wouldn't be there when we settled otherwise.

Like Dabbler, I get insurance as soon as I exchange. I'm told they will cover the property if the seller does not have insurance. But technically you are not the owner.

 

The house is in WA

 

If you do not have the contract, talk to who is looking after the matter to see where you stand.

Why did you not settle ?

What was said to delay or postpone & what is other sides view or reasons ?

Or are you just trying to get an idea before Mon comes around.

 

As far as I know, the seller. But you would have to check the contract to confirm

 

In SA, the buyer. Always ensure you get insurance from day dot here.

 

Because the house was broken into n all taps were on n flood the house prior to settlement, what complicated thing is this is a mortgagee sales n conveyance said normal the contract is in their favours,

 

@Yson, as others have said, you will need to read your contract.

When I am buying a property, I always add a Specual Clause that states the property is at the seller's risk until settlement.

I know - this is a bit late in your case.

 

I have been down this road and my solicitor advised that once you have a property under contract you need to take out insurance and the property becomes my responsibility. Whenever I buy property now I just do this straight away, best to be safe than sorry.

 

did you insure the house on exchange?

 

Hope you are using a solicitor and not a conveyancer too.

Under the common law the risk passes to the purchaser at the point the contract is entered into. That means it is your responsibility to insure the property. Any damage prior to settlement the purchaser wears.

But this can be modified by statue. In NSW for example the risk only passes at settlement (or earlier if agreed) because of s 66K of the covneyancing act.

So you have to ask your lawyer if there is an equivalent to s66K under WA law. I had a quick look at the property law act 1969 and couldn't see anything.

 

@Yson, I don't know how reliable this site is

LexisNexis Australia – LexisWeb – Practical Guidance

but it states:

"In Western Australia, the common law position that risk passes on exchange of contract applies, meaning that it is prudent practice for purchasers to insure their interest on exchange. However, the standard form contract effectively provides that risk passes on settlement."​

 

He would need to review his agreement with them. If it wasn't agreed that risk passes on settlement then it could be very costly to him.

 

If is a mortgagee, this could go either way, I think they will have things in their favor at a guess & they have the muscle to make a stand, you may be at their mercy, at the same time, I would be thinking they want to offload.

The amount of damage here will likely play a part, and the culprit, if caught, is not likely to have the money by the sounds of it.

If it were me, I would be looking closely at the damage and likely costs, see what position vendor takes, then if they say it is your issue alone, try and negotiate this not litigate.

I hope it works out for you.