Hi guys,
How do people deal with gaining early access to a property prior to settlement for renos when the vendor has concerns about insurance? Is there some type of insurance that would cover me and the vendor? We even offered earl release of the deposit as a sweetner, but no cigar.
Tools
Hi Tools,
Every purchaser should take out insurance as soon as contract is signed/exchanged. No exceptions.
I would hope your solicitor would have advised you to do this. Get it in place, and hopefully this will alleviate the vendors concerns. All the best.I would check your contact carefully if I were you.
I have just bought 2 properties and both contracts had a "death" clause in them that if either paty dies or becomes incapacitated, the contact is voided. Never come accross it before so it may be the latest thing to put in a contract but just check first. I was going to do just that but as one of the places I am purchasing belongs to a 92 year old man who is not in the best of health, I opted to wait instead of risking $20K on a reno and have the benefactors of his estate reap the benefits of my hard work if the worst happens.
Maybe this is the reason why the vendors won't give you access to the property?
Regards
v8ghia wrote:Hi Tools,Every purchaser should take out insurance as soon as contract is signed/exchanged. No exceptions.
I would hope your solicitor would have advised you to do this. Get it in place, and hopefully this will alleviate the vendors concerns. All the best.You have missed my point. I haven;t bought the place yet, but in speaking with the vendor they said they are concerned about the insurance implications of allowing us early access. Normal landlord insurance will not cover us for renovations, especially on a property we don't yet own.
bespoke wrote:I would check your contact carefully if I were you.
I have just bought 2 properties and both contracts had a "death" clause in them that if either paty dies or becomes incapacitated, the contact is voided. Never come accross it before so it may be the latest thing to put in a contract but just check first. I was going to do just that but as one of the places I am purchasing belongs to a 92 year old man who is not in the best of health, I opted to wait instead of risking $20K on a reno and have the benefactors of his estate reap the benefits of my hard work if the worst happens.
Maybe this is the reason why the vendors won't give you access to the property?
Regards
Fortunately you can't get much deader than dead.It is a deceased estate.
Tools
I know where you are coming from.
You can get a cover note for the insurance before settlement occurs.
If you get landlords insurance it usually as a public liability insurance component
to cover the incident where a trade person doing a quote trips over and is injured
and decides to sue the owner.
You do not want to do renovations until settlement occurs or you run the risk of providing a free renovation to the vendor if things go wrong.Also as I found out the hard way
the bank lending the money won't give out the funds unless they see you have a certificate of insurance on the property.Tools wrote:You have missed my point. I haven;t bought the place yet, but in speaking with the vendor they said they are concerned about the insurance implications of allowing us early access. Normal landlord insurance will not cover us for renovations, especially on a property we don't yet own.Your post did not indicate this – I assumed (incorrectly) you must have already purchased. This is even easier. There are plenty of clauses around regarding early access/renovations prior to settlement etc etc you can get inserted into your sale contract. These always cover both parties (Rob Balanda has an excellent clause for this type of thing in an API article a while back).
Once unconditional, both parties are protected. However, when all is said and done, it is within the vendors right to decline this proposal, and if that doesnt suit your purposes or timeframe I'm sure you should be able to deduce the only two options left for you……HI There,
As someone who sells insurance realistically I can confidently tell that you cannot have a valid insurance policy unless you have an insurable interest (usually financial) in the property and this does not occur until settlement.
Covernotes can be taken out as at the settlement date to placate banks but the taking out of an insurance policy on a house which belongs to someone else is actually against the law and will not be valid. Only the person who owns the house can take out cover therefore early access does pose a problem from a vendors perspective as you become their invited guest and their policies may become voided if you are responsible for damage. Also many insurance companies have exclusion clauses when renovations are happening anyway and most domestic insurance companies will not take on your property as new business whilst under renovations and unoccupied. Read the PDS to get a clearer picture on this.
From a common sense perspective if a party without a current financial interest could take out a policy and obviously the owner has a right to a policy also then in the event of a total loss the insurance company would have to pay out both parties on the one house. Building insurance is quite different to life insurance and only one policy is allowed.
Nat
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