When purchasing a property, one of the most important items to tick off is securing Building Insurance. Without this your valuable investment is at risk and leaves you vulnerable if something were to occur. In most cases, lenders state this is a condition of the loan.
The question you may well be asking yourself, do I need home insurance before settlement day?
In Queensland, the buyer becomes responsible from 5pm the next business day after both parties have signed the contract. Therefore, if there’s damage to the property after 5pm the next business day, the buyer is responsible for covering that damage.
Most buyers in Qld are unaware of this and something which is not highlighted or advertised regularly.
I can almost guarantee a sizeable percentage of readers will not be aware this.
The Property Law Act 1974 (Qld) does entitle a buyer to terminate a contract if a dwelling is destroyed or damaged before settlement so as to be “unfit for occupation”, but in less extreme circumstances, or where the damage is not to a dwelling, you could face the prospect of having to settle on the purchase of a damaged property.
Even if you did have the right to terminate due to the damage, if you have the benefit of insurance, the property may remain a worthwhile investment for you, and you could still choose to proceed.
To summarise:
- As soon as you sign the contract, you absolutely do have an insurable risk;
- Obtain property insurance immediately to be sure that your investment remains a sound one.
