Protecting Your Investment

Home Insurance

Make sure you are clear about exactly when you are responsible for the insurance of your property.

Even though the property may be covered by the seller's insurance up until the date of settlement, it is recommended that the buyer take out building and contents insurance, effective from the date of signing the contract.

If you have a mortgage your lender will expect you to have home building insurance. This should be essential even if you have paid off your home because it covers damage or loss to the building and its fixtures.

If you buy into a community titles scheme (eg. townhouse, villa or home unit), the body corporate will generally have to take out insurance to cover common property but you are responsible for insuring your contents.

Loan Insurance

If you are heavily mortgaged you may also be obliged to take out mortgage insurance - this protects the lender, not you, if there is any shortfall in your payments or if you default. If the insurance company makes a payment to the lender, the insurance company will pursue you for that payment.

Consider insurance to cover:

  • unemployment, sickness and disability;
  • death; and
  • loss of home contents.

Shop around to get the best deal. Get atleast three quotes from authorised insurance companies.

Compare your cover. Read the policy document right through. Most insurance policies cover only what's defined in the policy and nothing else.

For more advice regarding insurance visit the Australian Securities and Investment Commission website at https://www.moneysmart.gov.au.

Other protections

In addition to the protection offered under the law, the Queensland Government secures your interests in land by registering transfer of ownership, mortgages and other interests in the land registry maintained by the Department of Natural Resources and Mines (NR&M).

The Queensland Government guarantees your interests as a registered proprietor (a property owner or mortgage) and protects you from loss in a range of circumstances, such as fraud by another party or errors in the land registry. However this guarantee does not apply in cases where you or your lawyer have contributed to the situation.

To obtain the protective benefits provided under this system, you must ensure the timely recording of your land dealings in the land registry. Registration can only occur when the correctly completed and duly witnessed documentation is lodged with the land registry and the prescribed fees are paid.

Under Queensland law only solicitors are allowed to convey property transactions (legally transfer a property's title from the seller to the buyer) on behalf if interested parties. However, individuals may convey their own property dealings (ie. you can convey your own property transaction, but not anybody else's unless you are a solicitor).

Nevertheless, property law is complex and any errors or omissions in property transactions may have significant and costly consequences. People who are unfamiliar with legal requirements and processes for dealing with property should consider seeking their own independent legal advice.

Whether you use a solicitor or decide to do-it-yourself, conveyancing still incurs costs such as searches of the land registry at the Titles Registration Office, certificates of rates, zoning, stamp duty and registration fees.

For a small fee, information on current or historical interests in land is readily available by undertaking a search of land registry information (see Getting a valuation, Sources of information). Searches can be done over the counter NR&M offices around Queensland or through authorised online service providers.

More information is available from the NR&M website www.nrm.qld.gov.au or by phoning the land registry on (07) 3405 6900.

Once your property has officially settled, as a property owner you should consider having an enduring power of attorney so that if the need arises your property interests can be looked after.

If you have bought the property together with your spouse or another person, and if you hold the property as tenants in common (rather than joint tenants), it is recommended that you have a valid will covering your interests in the property. General information can be obtained from Queensland's Public Trustee - www.pt.qld.gov.au.

Next Page: Managing your Property (Becoming a Landlord/Lessor)