What Insurance Should I Get (Landlord Insurance ?) New House Purchase

Donaldhump on 22/06/2021 - 22:02
Last edited 22/06/2021 - 22:03

I am buying a new house(Qld) 3 weeks till settlement, and it is privately rented from what I can tell from the owner to a bunch of randoms they know (some how).

The property contract has no lease agreement so they are expected to be moving out, and all indications looks like they are.

I have taken out building and contents insurance , however this does not cover malicious acts by people living there.

To add an extra layer of insurance on top I want I believe landlord insurance, but snags hit so far.

  1. CGU excludes properties for sale which it technically is ( or may not be as offer accepted)
  2. Terrischeer asks for rental $ which I am unsure about so I could just guesstimate it as I really don’t care for lost rent, as they will be gone by then, I hope.

Any other suggestions.

I am planning on pre settlement inspection, but who knows what options there are if the place gets trashed or they are still living in place.

Any tips please

Financial Home Insurance Insurance

Comments

  • bobbified on 22/06/2021 - 22:09
    +3

    The property contract has no lease agreement so they are expected to be moving out, and all indications looks like they are………however this does not cover malicious acts by people living there.

    Can you do settlement after the current tenants move out?
    That'll hand the responsibility of any potential malicious damage by the tenants back to the current owner since the property has to be in the agreed condition at settlement.

    • SF3 on 22/06/2021 - 22:19
      +2

      Can you do settlement after the current tenants move out?

      I reckon, that should be a condition for seller to ensure before settlement. It needs to be the vendor’s problem.

    • Donaldhump on 22/06/2021 - 22:36

      That’s the plan, but if they trash the joint settlement must occur anyway unless it’s in a non habitual state. They could Axe every wall and still be considered habitable.

      Qld only has property act section 62 or 64 from memory

      Common sense would suggest your answer but I’m unsure.

      • Quantumcat on 23/06/2021 - 06:53

        If anything is damaged when you view it in the presettlement inspection you can make the seller fix it or give you the money needed to fix it.

        When I bought my house there was a hail storm just before settlement that trashed the pergola. The conveyencer made the seller set aside some money, and she had to get it fixed by a certain date to get that money back, if she didn't we got to keep it. Hopefully you have a good conveyencer who can do something similar (if there's malicious damage).

        • Donaldhump on 23/06/2021 - 08:32

          yeh just worried as u may be in a sensible state

  • Clear on 22/06/2021 - 22:22
    +1

    When taking out landlord insurance be sure to check the PDS to see what's covered. I was caught out with my rental property in the past where only specific things were covered. For example, a lot of the cheaper insurance companies will exclude things like shower bases that are more prone to breakage in older houses, or if a builder hasn't put in supports. The other thing to check for is rent defaults, as companies like NRMA have removed that from new policies.

  • TheMindsetTraveller on 22/06/2021 - 22:38

    Just because there is no lease agreement does not automatically mean they need to leave;

    What does your exchanged contract say? is it vacant possession or not?

    • Donaldhump on 22/06/2021 - 22:39

      Neither but no lease agreement assumes vacant possession afaik, otherwise a vendor living there could squat as well. But it is a possibility for sure.

  • Meho2026 on 23/06/2021 - 04:40
    +3

    Get your solicitor to find out from the seller if they have given the tenants the required notice to vacate. I think that is 2 months in QLD.
    Even though they have no lease if they can prove they’ve been paying rent they got the same rights as having a lease.

    You usually get to do a final prepurchase inspection the day before settlement. If the place is trashed or the tenants are still there then delay the settlement until it’s rectified.

    The tenants might’ve paid a bond to the seller.
    They probably unlikely to trash the joint if they friends of the seller.

    You won’t be able to get landlords insurance buying with vacant possession on an owner occupier loan with no lease in place.
    Or if you buy it, your claim will be denied.

    If the tenants have the place in good condition now, they are unlikely to trash it for the sake of it.
    Just don’t expect it to be clean

  • Duckie2hh on 23/06/2021 - 09:03
    +1

    Do not settle if the tenants have not moved out at pre-settlement inspection.

  • AndyC1 on 23/06/2021 - 09:19

    Watch it as the tenants may not be paying rent and if they are still there when you take possesion may still not pay rent and you will spend allot of time money and effort getting them out. If they are going through a real estate agent then you need to get the REA details so you can speak with the REA about the lease.

    In summary if there is no lease then you have a major problem on your hands.

    • Donaldhump on 23/06/2021 - 09:30

      yeh no lease, guess the cops would then get involved or 50 bikies.

      • AndyC1 on 23/06/2021 - 17:25

        be civil, which cops love as they just say its a cival mater and wash their hands of it.

    • ihbh on 23/06/2021 - 09:50
      +1

      Or they could squat for 7 or however many years and then take possession of his property.

      • Donaldhump on 23/06/2021 - 10:06

        yeh 12 years but thats only if the owner has abandoned the property, plus it would never settle.

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