Queensland Law Society is aware many insurance companies have placed an embargo on issuing new insurance policies for properties in the area likely to be affected by Cyclone Alfred.
For conveyancing matters, practitioners should make their clients aware of the issue and consider the insurance and contract implications for their clients.
They should also advise their clients to contact their insurer or insurance broker directly to properly understand their own specific policy and potential insurance implications.
If the parties have signed a REIQ contract, practitioners are reminded that under the standard terms, the property is at the buyer’s risk from 5pm on the first business day after the contract date.
A buyer who has recently entered into a contract, or is contemplating entering into a contract, may not be able to obtain insurance or insurance coverage may be limited.
Practitioners should advise their clients, whether seller or buyer, of the risks arising if one of the parties is unable to obtain or does not maintain insurance until settlement, including potential loss outcomes and the limited termination rights if the property is damaged; and all options available, which may include cooling-off rights, special conditions, delaying the contract signing etc.
Natural disasters can also bring significant disruption and potential property damage during the contract period. Contractual options may also be available, including cooling-off periods or extensions of time for critical dates.
Practitioners should also consider the remedies available under the Property Law Act 1974 if there is damage to the property.
Clients should also be encouraged to contact their insurer directly to clarify their coverage options.
For practitioners insured with Lexon, the Extreme Events – Law Practice Disruption Guide includes a section on conveyancing matters. The Conveyancing Protocol also provides advice to the client on risk passing to the buyer, the potential unavailability of insurance and if damage occurs during the contract period.
QLS members can also contact the Law Foundation’s Solicitor Assist Hotline for free, on-the-spot, phone advice with assured solicitor/client confidentiality.
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