Consumer Affairs Victoria can help with property transaction issues in a disaster, such as a storm, flood, bushfire or earthquake.
Advice for sellers
Accepting an offer to buy a property that has been destroyed or damaged
You can accept the offer. However, the buyer may have three business days after signing the contract of sale to withdraw from the sale (‘cool off’) and receive any deposit back in full. This three day cooling-off period does not apply to a property purchased at auction.
If the offer is conditional, the buyer may still end the contract depending on the conditions of the offer.
Consult a legal practitioner or a conveyancer.
Settling a contract of sale for a property that was damaged or destroyed
It will depend on the damage to the property. If the house has been destroyed or damage makes it unfit for human occupation, the buyer can end the contract before taking possession of the property.
The buyer has 14 days from the date of becoming aware of the damage or destruction of the house, to end the contract. If the buyer ends the contract, you must refund any money paid by the buyer.
If the damaged property is still liveable, you are responsible for organising and paying for any repairs. Contact your insurer and consider seeking expert advice to assess the extent and cost of the repairs to the house.
Consult a legal practitioner or conveyancer about settlement and responsibilities for repair.
Unexpected offers to buy your property
Take time to consider the offer and your overall financial position. Talk to experts such as estate agents, conveyancers and legal practitioners about the amount offered. Contact us if you think you have accepted an unfair offer.
Advice for buyers
Withdrawing an offer to buy a destroyed or damaged property
You may have three business days after you make a written offer to 'cool off' and withdraw your offer. You can only do this by giving written notice to the seller or to their estate agent.
If the three-day cooling-off period has finished and the seller has accepted your offer, you may have a right to end the contract of sale and to a full refund of your deposit, but only if the house is destroyed or so damaged that it is unfit for human occupation. Seek advice from a legal practitioner or a conveyancer.
Recently bought property that was since destroyed or damaged
You may have a right to end the contract of sale and to a full refund of your deposit if you are not in possession of the property (that is, settlement has not occurred). The right to end the contract only applies when the house is destroyed or so damaged it is unfit for human occupation.
To end a contract under these circumstances you must do so in writing within 14 days of becoming aware of the destruction or damage. You should seek advice from a legal practitioner or a conveyancer about ending the contract.
If a damaged property is still liveable, it is the seller’s responsibility to organise and pay for repairs.
The seller’s insurance policy will also benefit you, from the date you signed the contract to when you take possession of the property, unless you have other cover. Discuss repairs with the seller and get their insurance details.
Consider seeking expert advice to help you assess the extent and cost of the repairs needed.
Last updated: 16/01/2012