Buying a new property is an exciting time for anyone, but it can also be a bit overwhelming and confusing. As soon as you sign that contract to buy a property there are a whole host of things that need to be done and considered. One of these things that is often overlooked, but really should be at the top of your to-do list is the issue of insurance.
What many buyers don't realise is that as soon as they sign a contract of sale, they become responsible for the property, even though they don’t yet own it, or live in it. In Queensland once the contract is signed the property is at the buyer’s risk from 5:00pm the following business day. What this means is that as a buyer it becomes your responsibility to insure the property from this time, as if anything should happen to the property, such as being destroyed by fire prior to settlement, then it is your loss to wear, not the seller’s.
An insurance company can organize a cover note with a simple phone call, or via the Internet to ensure the property is protected before this strict time limit expires. If you are taking out a mortgage over the property, then you muse ensure that the financier is noted on the policy as an interested party, who may also set a required amount of cover to be taken out.
You only need to take out insurance over the building, not its contents, as these remain the responsibility of the seller, but ensure that any fixtures, or chattels included in the sale are insured under the policy you take out.
However, if you are buying a townhouse or apartment then the insurance for the property is the responsibility of the body corporate. They should hold insurance for the buildings and the common property, including public liability insurance for accidents that occur on common property.
Your lawyer will conduct searches as part of the conveyancing process to ensure that the body corporate has the required insurance in place prior to settlement.