A Buyer’s Guide
One of the most commonly misunderstood areas is insurance, particularly the point at which the risk of the property passes to the buyer. As solicitors, our role is to warn clients about these risks and help them take proactive steps to protect themselves.
When Does the Property Become the Buyer’s Risk?
Under the standard REIQ contract in Queensland, the property is at the buyer’s risk from 5:00 pm the next business day after the contract date, unless the contract states otherwise.
This means that if the property is damaged by a storm, flood, fire, vandalism, or any other event, the buyer may bear the loss, even though they do not yet own or occupy the property.
Many buyers mistakenly assume that risk only transfers at settlement or when the contract becomes unconditional. This misunderstanding often leads to inadequate insurance coverage at the most critical time.
Strata living has become a popular choice across Queensland, offering convenience, shared facilities, and community-based management. However, purchasing a property in a community titles scheme comes with responsibilities that many buyers do not fully appreciate.
When buying a Community Title Property, Does Strata Insurance Protect You?
In Queensland, the body corporate is responsible for arranging strata insurance to protect the building and common property on behalf of all lot owners.
Buyers of community title lots, such as apartments, townhouses, and villas, often believe that the body corporate’s strata insurance provides full protection. This is incorrect.
What Strata Insurance Generally Covers
- Common property such as hallways, stairwells, lifts, carparks, and swimming pools
- Structural components and fixtures forming part of the building
- Shared facilities maintained collectively by the body corporate
What Strata Insurance Generally Does Not Cover
- Individual lot contents or personal belongings
- Renovations or improvements undertaken by owners
- Exclusive-use areas, unless specifically included in the policy
This means buyers should not rely solely on strata insurance, especially once the property is at their risk under the contract.
Assumptions that “Body Corporate Will Cover It”
Claims often fail because buyers do not understand the limits of strata coverage.
These risks become even more serious once the property is legally at the buyer’s risk before settlement.
Why Waiting Until The Contract Is Unconditional Is Risky
Some buyers delay arranging insurance until after finance or building and pest conditions are satisfied. This is not recommended for two reasons:
You Cannot Obtain Insurance During Severe Weather Events
Insurers frequently impose new-policy embargoes during:
- Storms
- Severe weather warnings
- Flood alerts
- Bushfire alters
- Cyclones
For example, during the 2022 Brisbane floods, many insurers suspended the issuance of new policies for several weeks. Any buyer who had not already arranged insurance would have been left fully exposed while the property was at their risk.
Natural Disasters Can Occur Anytime
Queensland’s weather is unpredictable. Waiting even a few days may mean being uninsured at the exact time the risk has already passed to the buyer.
For these reasons, buyers should arrange suitable insurance immediately after signing the contract, regardless of any contractual conditions that are yet to be satisfied.
If, for any reason, the buyer does not meet the conditions under the contract—such as the building and pest condition or the finance condition—the buyer may still rely on the insurance policy’s cooling-off period. An insurance cooling-off period is a specified timeframe (generally between 14 and 30 days from the policy commencement date) during which the buyer may cancel the policy and obtain a full refund, provided no claim has been lodged during that period.
How Buyers Can Protect Themselves
To minimise risk, we recommend:
- Obtain insurance immediately after the contract is signed
- Request and review the body corporate’s Certificate of Currency annually
- Confirm the sum insured reflects current market replacement costs
- Obtain Contents or Landlord Insurance for internal risks
- Seek legal or financial advice before undertaking renovations or changes that may impact coverage
How W & G Lawyers Can Help
At W & G Lawyers, we assist buyers, sellers, and investors with:
- Reviewing strata documents;
- Advising on compliance with legislation;
- Guiding clients through property purchase contracts; and
- Protecting buyers from unexpected liabilities.
Our advice is practical, risk-focused and tailored to your circumstances. Whether you are buying your first property or expanding your investment portfolio, we ensure your interests are protected at every step.
Visit or Contact Us
https://wglawyers.com.au/nancy-wang/
Address：68 Bryants Road, Shailer Park, Queensland, 4128
Email：info@wglawyers.com.au
Phone：(07) 2810 5666
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Disclaimer
This article contains general information only and does not constitute legal advice. You should obtain specific legal or financial advice relevant to your circumstances before taking any action.