When natural disasters strike, it can often lend itself to increased stress on home buyers & sellers should they have existing contracts in place within a disaster zone.
Passing of Risk – In most cases, the risk of the property passes to the buyer shortly after the Contract has been signed. It is therefore extremely important that the Buyer obtains adequate insurance over the property as soon as possible.
Termination Rights – You should speak with your conveyancer about any termination rights that might apply such as cooling off period, finance, building and pest or special conditions. In certain circumstances termination rights pursuant to s64 Property Law Act 1974 may apply where the property has been destroyed and deemed unfit for human occupation.
Suspension of Time – Certain contracts such as the REIQ Contract for Houses & Land 15th Edition, allow for a suspension of time in relation to settlement obligations of the contracting parties where their performance is prevented as a result of a natural disaster.
The ADL form Contract provides a broader range of suspension of time rights.
If this applies to you, it’s important that you speak with your conveyancer as soon as possible so that you can be made fully aware of your contractual rights & obligations under your Contract.