hello all
like many others Ive been following this forum for a couple of years now. recently I purchased my first property in albion .. Melbourne.. Its a long settlement .. settlement date 12/12.. I was wondering should I get building insurance now or wait till settlement date.. if something were to happen in this period whos liable.. me or the vendors.. my mortgage broker recommends I wait as in 99 % of the loans she's doen her clients usually wait till settlement date..one more question.. has anybody else been scouting that area… cause I'm thinking of buying another property in that sunshine/ albion zone… prices have gone up about 10 % in the last 6 months.. so is there more room for growth or should I look outwards as in Arderer, Deerpark, st albans .. sunbury and the like…
Hi Ray30
Congradulations on the purchase of your first investment property.
If you check the fine print on the contract it normally states who is responsible for insurance between signing and settlement.
I have just checked a standard REIQ contract (Queensland). And under the heading of "risk" it states that "The property is at the Buyers's risk from 5pm on the first business day after the contract date". Therefore the buyer is responsible for insuring the property as they have the "insurable risk"
My suggestion would be to insure once you sign the contract regardless of the lenght of time between signing and settlement.
Don
Hi Okkamooie
I'll get on it first thing tommorow morning. Thanks for the advice.
Ray
Hi Ray,
You should get it as soon after signing the contract as is practical – ie straight away, or at the latest the next day, and do not wait until settlement. The "settlement period" is kind of a grey area in-so-far-as ownership is concerned. It's not yours yet, but it will be, and while the vendors still have possession, they have effectively agreed to sell it to you, (and thus have probably lost interest because mentally they no longer have any responsibility and are just killing time until they get their money).
If there was an issue – a fire or what ever – it can get complicated. For the cost of a couple of months of insurance it is not worth the risk.
Thanks,
BDM
Ray 30,
Congrats on your purchase. We have also just purchased our first IP and are waiting to complete. I've just checked our (NSW) contract and item 5 of the Warnings on the front page states:
"The vendor should continue the vendor's insurance until completion".
It looks like there are different requirements for different states, so have a check of your VIC contract.
cheers
John
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