Duncan Murdoch, one of our Directors here at Ryan Murdoch O’Regan, and a Property & Business Expert, was recently approached in regards to contractual obligations for sellers and purchasers who are currently under contract to sell or purchase real estate where the property being sold / purchased has been affected by the current floods.

Darren Cartwright of News Corp Australia Network writes…

“A little known property law may allow owners-in-waiting to terminate a contract for a flooded property, although some most likely will have to go through with their purchase, experts warn.

Under a standard Queensland contract of sale, the ‘risk’ of the property passes to the buyer on the first business day after it is signed, said veteran property law specialist Duncan Murdoch.

Conditions, such as pest and building inspections and subject to finance, may provide enough wriggle room for the buyer to pull out of a contract, the director of Ryan Murdoch O‘Regan Lawyers said.

“Under standard contract terms, the risk passes to the buyer on the first business day after the contract is signed,” the 30-year property law specialist said.

“If you’ve bought a house and it’s flooded, effectively the buyer is left holding the baby unless it is uninhabitable but that definition is different for each property.”

If a house is deemed to be damaged or destroyed to the point it is “unfit for human habitation”, then buyers could terminate a contract and recover their deposit, according to Queensland Legal Assistance Forum (QLAF) guide to practitioners.

However, whether a dwelling is fit for human habitation is a “question of fact and degree in each case”, the guide states.

“Mere water inundation would not be enough to rely on this section; there must be some physical damage to the property that requires repair.”

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If you have any legal questions in regards to contractual obligations CALL DUNCAN now on 1800 999 529, email mail@rmold.newwebsite.live or submit an enquiry below.