Insurance cover when entering into an Agreement for Sale and Purchase
If you are considering entering into an Agreement for Sale and Purchase, whether it be for a rural or residential property, purchasers should be mindful that obtaining insurance for the property may not be as easy as it once has been. Following the recent earthquakes in Wellington and Malborough some insurers are restricting the issuing of new policies. Before any Agreement for Sale and Purchase is confirmed unconditional, purchasers need to first ensure they will have adequate (and acceptable to any lender) insurance cover in place for the property.
Is it appropriate to include a clause to make the contract subject to obtaining suitable insurance?
Thanks for the question Howard.
If the purchaser is obtaining finance then insurance will be a condition of the finance – so if insurance can’t be obtained then the finance condition will not be satisfied. If the purchaser is not obtaining finance then a clause which makes the agreement conditional upon obtaining insurance is a very good idea. It is also possible to use a well worded due diligence clause which allows the purchaser to look at the ability to obtain insurance over the property.
We will be covering this issue at a seminar for all agents that we will hold shortly.