With Cyclone Alfred approaching, many insurance companies have imposed embargoes on insurance coverage for affected regions, particularly across various Queensland postcodes. This situation directly impacts property transactions, particularly concerning insurance matters.
Understanding the Transfer of Risk in Property Transactions
In Queensland, standard property contracts often include a clause (Clause 8.1) specifying that the risk associated with the property transfers to the buyer at 5:00 PM on the next business day after both parties have signed the contract. This applies to both residential and commercial properties.
Given this, buyers must be proactive in securing property insurance as soon as possible after signing a contract to mitigate risks associated with potential damage caused by natural disasters.
Legal Considerations and Recommendations
If you are involved in a property transaction during a cyclone or other severe weather events, consider the following:
- If you have not yet signed the contract – It may be advisable to delay signing until after the cyclone has passed. Additionally, negotiating risk-related clauses in the contract could help safeguard your interests.
- If you have already signed the contract and have concerns – Seeking immediate legal advice is crucial. You may need to explore options related to contract conditions, insurance coverage, or potential renegotiation of terms.
At Ensure Legal, we assist buyers and sellers in navigating legal complexities arising from natural disasters and insurance-related issues. If you require further advice on your property transaction, feel free to contact us.
Disclaimer: This article provides general information and does not constitute legal advice. Always consult a qualified lawyer for guidance specific to your situation.
