When risk passes. In Queensland a property is at the buyer's risk from 5pm on the first business day after any contract date. This is a critical difference from some other states: risk shifts to you almost immediately after signing, not at settlement. The seller has an obligation until settlement to take reasonable care of the property, but that does not remove your exposure once risk has passed.
Damage between contract and settlement. If the property is damaged between the contract date and settlement (for example by fire or vandalism), buyers must still settle unless the property becomes unfit for occupation. Because risk sits with you from the first business day after contract, an uninsured buyer could be left completing the purchase of a damaged property.
Insurance — arrange it immediately. Buyers should not rely on the seller's insurance. Instead, you should arrange insurance cover for the home/building, contents and public liability immediately on entering into a contract, so that it is in place before the property is at your risk. Note the standard advice that a seller should maintain their own insurance until settlement is confirmed — but that protects the seller, not you, so it is not a substitute for arranging your own cover.
Strata property insurance. Body corporate responsibilities: insures common property, body corporate assets, public liability for common areas, and building structure; lot owners share costs based on entitlements. Lot owner responsibilities: insure the interior of the lot, including home contents and public liability insurance for interior spaces.
Low-rise development insurance. Body corporate: insures common property, assets, public liability, and building structure only where buildings share common walls. Lot owner: insures building structure if no common walls exist; insures the interior with contents and public liability coverage.
Risk and insurance at a glance (QLD)
| Property type / scenario | When risk passes to you | Who insures the building | What to do |
|---|---|---|---|
| Standalone house | 5pm on the first business day after the contract date | You (the buyer) | Arrange building, contents and public liability cover as soon as you sign |
| Strata unit (shared or common walls) | 5pm on the first business day after the contract date | The body corporate (building and common property) | Take out contents and interior public liability cover |
| Townhouse with no common walls | 5pm on the first business day after the contract date | You (the lot owner) | Check the body corporate rules; take out your own building cover |
| Property becomes unfit for occupation before settlement | The exception | — | You may be able to end the contract rather than being forced to settle |
General information only — not legal advice. Confirm your situation and the exact contract terms with a licensed conveyancer or solicitor.