Central and North Burnett Times - - HAVE THE TIME OF YOUR LIFE... 50+ -

Con­tracts for the pur­chase of a res­i­den­tial house or build­ing unit con­tain pro­vi­sions within the terms of con­tract stat­ing when risk passes to the Buyer. The rel­e­vant pro­vi­sion for houses pro­vides that the prop­erty is at the Buyer’s risk from 5:00pm on the first busi­ness day af­ter the con­tract date. A busi­ness day is defi ned to mean a week day other than a pub­lic hol­i­day in the place for set­tle­ment. For ex­am­ple, if prop­erty is pur­chased on a Fri­day or on the week­end, the risk will pass to the buyer at 5:00pm on the fol­low­ing Mon­day. This pro­vi­sion al­lows the Buyer time to ar­range suit­able in­sur­ance over the prop­erty. The con­se­quences of a Buyer not ob­tain­ing ad­e­quate in­sur­ance cover could be ex­treme, if the prop­erty was to be dam­aged to some ex­tent prior to com­ple­tion. Ac­cord­ingly, if the prop­erty was dam­aged then as it is at the risk of the Buyer, the Buyer would be forced to com­plete the sale with­out any ad­just­ment for loss in value or re­pairs which may be nec­es­sary. Sec­tion 64 of the Prop­erty Law Act 1974 (“Sec­tion 64”) does how­ever, al­low a Buyer to re­scind a con­tract where the dwelling house sub­ject of the sale is de­stroyed or dam­aged so that it is un­fit for oc­cu­pa­tion as a dwelling. The de­struc­tion must oc­cur be­fore com­ple­tion or pos­ses­sion, which­ever is the ear­lier. The Buyer must also re­scind the con­tract in writ­ing no later than the date of set­tle­ment or pos­ses­sion. Sec­tion 64 ap­plies not­with­stand­ing any con­trary con­trac­tual stip­u­la­tion. Sec­tion 64 ex­tends to dwelling houses only and not to all build­ings or im­prove­ments which may form part of the prop­erty. It also ap­plies to build­ing units. It is pru­dent for both the Seller and the Buyer to main­tain in­sur­ance cover be­tween the Con­tract Date and the Set­tle­ment Date. A Buyer should ob­tain le­gal ad­vice prior to sign­ing a con­tract to en­sure that their rights and obli­ga­tions are clearly es­tab­lished and un­der­stood so that they ob­tain the nec­es­sary in­sur­ance to cover their risk.

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