After the recent wild weather in Sydney, soon-to-be homeowners may be rightfully concerned about their legal rights in the event that their dream home is damaged by a storm. Or conversely, you may have just exchanged contracts for the sale of your property and are wondering what your obligations are to repair the property after it has been damaged in a storm. 

After contracts have exchanged and before settlement takes place, the vendor of a property has an obligation to keep the property in the same state of repair as it was at the time of exchange. This means that if a storm, like the one’s we have been experiencing in Sydney recently, causes a stray tree branch to break a window or a tree to fall on a roof, the duty to repair the property rests on the vendor. This is because the legal title to the property remains with the vendor until title passes to the purchaser upon settlement, and the purchaser merely holds an equitable in the property until this happens. 

This is why it is important for vendors to maintain insurance over the property in between exchange and settlement and why we recommend purchasers obtain insurance over the property upon exchange, because unless there is a mortgage over the property, the vendor is not strictly obliged to have insurance over the property. 

Should the vendor be unable to return the property to the same state of repair it was in at the time of exchange of contracts, the purchaser is able to rescind the contract. That is, return themselves to the position they were in before entering into the contract. 

Seek legal advice before it’s too late. Contact us at O’Brien Connors & Kennett.