Building Insurance – Buyer Beware

Recently we were chatting to BLHL Property Conveyancing about a building insurance issue relating to when a purchaser should have their insurance in place by.

We’re lucky to partner with a great conveyancer in Helen Romanowski of BLHL Property Conveyancing. Recently we were chatting about a building insurance issue relating to when a purchaser should have their insurance in place by.

The issue:

After going to market, a listed property for sale was broken into by thieves.  The property was damaged, and copper pipes were removed and subsequently stolen.

The real estate agent still proceeded with open inspections, as per the vendor’s instructions. A special condition was added to the contract of sale ensuring that the vendor would make good the damages/theft before settlement of the future sale. These damages would be fixed through the vendor’s insurer.

After the contract was fully signed by all parties, the property was broken into twice again!  This time there was a dispute between the vendor and purchaser as to who’s insurer should cover the damages/theft, as a general condition in the contract – like the majority of all contracts, noted that the risk was the purchasers from the date of the contract.


The purchaser mistakenly hadn’t insured the property in time (not insured from the date that the contract of sale was fully signed).  Thankfully in this case, the vendor’s insurer agreed to cover all of the damages and theft. However, the insurer didn’t actually ask to read the contract terms, which could have been a different story with any other insurer, and could have had grounds to only cover the damages from the first break-in.

BLHL Property Conveyancing prepared an addendum/amendment to the contract that the vendor would reinstate the property as to its previous state before the open inspection, on the proviso that if there were any more damages/theft before settlement, the purchaser would be responsible.

So, the moral of the story is: the purchaser of a property shouldn’t take the risk and insure the property immediately from when the contract is fully signed.



*The information provided in this article is general in nature and does not take into account your personal circumstances. Since everyone’s personal situation is different, this article should not be taken as advice.