When does property risk pass to a buyer in Queensland?

Under commonly used REIQ residential contracts, risk ordinarily passes at 5.00 pm on the first business day after the contract date, unless the contract provides otherwise.

Should a buyer wait until the contract is unconditional to insure?

No. A buyer should check the contract and arrange adequate insurance as soon as the contract is signed.

Should a seller cancel insurance before settlement?

Usually not. Keeping the seller's policy until settlement protects against a contract failure and other risks.

What if the property is badly damaged before settlement?

The contract and legislation may provide rights where damage makes a dwelling unfit for occupation. Obtain urgent conveyancing advice rather than assuming the contract has ended.

Property Insurance Before Settlement in Queensland

Queensland buyers should usually arrange building insurance immediately after signing, while sellers should maintain their own cover until settlement. The precise position depends on the signed contract, not simply whether finance or building and pest conditions have been satisfied.

When risk passes

Under commonly used REIQ residential contracts, risk ordinarily passes to the buyer at 5.00 pm on the first business day after the contract date. A special condition can change that position, so both parties must read the actual contract.

Risk passing does not mean the seller can stop taking reasonable care of the property. It means the buyer may bear contractual responsibility for accidental loss or damage during the settlement period.

Insurance for both parties

A buyer should provide the contract details to the insurer and confirm that the policy begins by the relevant risk time. Waiting until the contract becomes unconditional can leave a serious gap.

A seller should generally keep adequate building insurance until settlement has completed. A contract can still fail, a termination right can arise, or an insurer may need to respond to an event occurring before settlement.

Do not assume the agent, bank or other party has arranged cover. Check the policy start date, insured property, replacement value and public liability cover. If damage has already occurred, contact the insurer and conveyancer immediately.

Who Insures a Queensland Property Before Settlement?

When risk passes

Insurance for both parties

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