Property

Last updated 12 April 2010

This factsheet is for people whose properties have been affected by a bushfire or who were buying or selling property during a bushfire. It will explain your legal rights and options, and has the contact details of helpful organisations.

You can order a hard copy of this factsheet from Victoria Legal Aid.

I made an offer to buy a property but it was then destroyed or damaged. Can I withdraw from the offer?

You have three clear business days after you make a written offer to 'cool-off' and withdraw your offer. You can only do this by writing to the seller or to their estate agent. If the three-day cooling off period has ended and the seller has accepted your offer, you may still have a right to end the contract of sale. You may also have a right to get back all of your deposit but only if the house is destroyed or damaged so much it is unfit for you to live in.

Get advice from a lawyer or a conveyancer about this.

I paid a deposit on a house before a fire. The house has burnt down or was damaged by the fire. What can I do?

Ending the contract

If the house was destroyed or damaged so much before settlement that you cannot live there, you may want to end the contract and get out of the sale. You need to give notice in writing. Do this before settlement of a cash contract or any earlier possession date that is in the contract. You must give this written notice to the seller (or their lawyer/ conveyancer) within 14 days after you become aware of the destruction or damage to the house.

The seller can make a claim on their own insurance policy to repair or rebuild the destroyed house. The seller must also give you back any money you had paid them and you must give back any documents such as titles and transfers to the seller. This only applies to residential properties that are unfit to live in.

There are a lot of decisions to be made if you want to end a contract. Get advice from a lawyer or a conveyancer.

Continuing with the purchase

If the property is damaged but you can still live in it, you may want to go on with the sale. It is up to the seller to fix and pay for the damages that need to be repaired. You have the right to ask the seller to repair the house so it is restored to the way it was when you put a deposit on it, as required under the contract of sale. You can delay settlement until the repairs are done.

From the time when you signed the contract to when you take possession of the property, any insurance policy that the seller has will also benefit you, unless you have separate coverage. There are some exceptions to this. For example, you may have changed this in your contract of sale or you may have deleted or changed the term that means the property is transferred in the same condition, except for wear and tear. Check your contract and find out the details of the seller’s insurance and the level of cover they have.

My property was burnt down or damaged and I have now got an offer for it. What should I do?

If you are approached to sell your property, regardless of whether your house has been damaged or destroyed, take your time to consider the offer.

Talk to other people in your local area about the amount of the offer and to experts such as estate agents, conveyancers and lawyers.

Have a good think about your overall financial position before accepting any offer. Contact Consumer Affairs Victoria on 1300 558 18 if you think that you have accepted an unfair offer.

I want to sell or rebuild a jointly-owned property that was affected by a bushfire. The other owner does not want to sell. What can we do?

If you are one of two owners and you want to do anything with your jointly owned land (for example, lease, sell, repair or renovate), you and the other owner both need to agree to it. Check first to see if you made any agreement with the other owner about how to divide property as this may address the issue.

If you cannot agree, you may need to apply to Victorian Civil and Administrative Tribunal (VCAT) for a decision to be made. VCAT runs more informally than a court. It can help resolve your dispute, make decisions that must be obeyed and order damages to be paid.

VCAT will usually allow you to sell the property and then you can split the proceeds with the other owner. VCAT does not usually allow for the physical division of the land.

Your mortgagee/lender might also get involved and want to have a say in how the insurance money is spent.

My destroyed property was used as security for the loan on another property I bought. What happens now?

A property which has been used as security for a loan acts as a protection for the lender if you default (miss repayments) on the loan. If the property was damaged, you still need to make regular loan repayments. Usually you need to tell the lender as soon as possible about any damage to the property that was being used as security.

In most cases, the lender has standard expectations for the property being used as security, such as requiring that you have insurance on the property. If the property is damaged or destroyed, the lender will then require that you pay them any insurance money you get. After this happens, you and the lender will work together to use that money for repairs, replacements and rebuilding. You can expect that the lender will take control of any negotiations with the insurer. Not all arrangements work like this though. Check the terms of your mortgage document.

If the destroyed property was not insured, the lender might want to work out again the security for the loan and could require you to give more security or repay the loan. They might want the loan paid in full or in part.

My property was destroyed. I owe tradespeople money for work on the property. Do I have to pay?

Yes. Your contract with the tradespeople (to do work on the house) is treated separately. You have to pay for the work that they completed under the contract. If the damaged property is insured, you may be able to claim on the insurance policy and recover your losses separately.

I was building or renovating my home at the time of a bushfire and the fire has damaged the building work. What should I do?

Usually, you still have to pay for work that tradespeople or your builder did under the contract. Talk to your builder. The builder’s general construction insurance may cover the damage. You will still have a contract between yourself and the builder. Contact your builder and ask for another copy of the contract if you no longer have yours. It is possible that your insurance covers any renovations that were taking place. See Bushfire Legal Help’s Insurance factsheet for more details.

Part of my property was destroyed by the Country Fire Authority while fighting a fire. Who pays for the repairs?

Because the Country Fire Authority is a public authority it does not have to pay for any damage caused during fire fighting activities. This is not the case if the damage was done on purpose by the public authority or because of its negligence. Get legal advice if you think this is the case.

If you have fire insurance, this damage will be covered. Collect evidence as soon as you can to give to the insurer. Photographs and a written timeline of what happened may be useful.

My waterline was damaged during a fire. Who pays for the repairs?

Check with your insurer to see if you are covered for this damage. You should also check your contract with the water supply authority to see if it contains any guarantee of supply or if it tells you what they do to deal with repairs.

My neighbour’s tree fell on my property during a fire and destroyed the shed. What can I do?

If you are insured, you can make a claim with your insurer. If you are not, you can apply to VCAT. You can also make a claim in the Magistrates’ Court (or the Supreme Court if your claim is over $100,000). The court can order that damages are paid to you, if you are successful.

The law is complex in this area. Get legal advice if you wish to claim for damages.

Where to get help

Victoria Legal Aid

Tel: 1800 113 432, Monday to Friday, 8.45 am to 5.15 pm, for free bushfire legal information and referrals, www.legalaid.vic.gov.au/

Consumer Affairs Victoria

Tel: 1300 558 181, Monday to Friday, 8.30 am to 5 pm, www.consumer.vic.gov.au (see Bushfire FAQs on homepage)

Magistrates’ Court

For phone numbers see ‘Court locations’ on www.magistratescourt.vic.gov.au and look for the courthouse closest to you.

Victorian Civil and Administrative Tribunal

Tel: 9628 9700 (general) or 1800 001 099 (Bushfire Information Line), Monday to Friday, 9 am to 4.30 pm, email: vcat@vcat.vic.gov.au (add ‘Bushfire priority’ into your subject header), www.vcat.vic.gov.au

Victorian Bushfire Reconstruction and Recovery Authority

Tel: 1800 240 667, Monday to Friday, 8 am to 6 pm (opening hours may vary in times of emergency), http://www.wewillrebuild.vic.gov.au/

Department of Human Services (DHS)

Tel: 1800 050 400 (Victorian Bushfire Case Management Service), Monday to Friday, 8 am to 5 pm and tel: 1800 240 667 (Victorian Bushfire and Storm Information Line), Monday to Friday, 8 am and 6 pm, www.dhs.vic.gov.au/em/bushfire-recovery

Counselling and support

NURSE-ON-CALL Bushfire Health and Counselling Line: 1300 606 024, seven days, 24 hours a day

Beyond Blue: 1300 224 636, seven days, 24 hours a day, www.beyondblue.org.au

Interpreters – Translating and Interpreting Service (TIS)

Tel: 131 450, seven days, 24 hours a day

Hearing impairment – National Relay Service

Tel: 133 677 (TTY service) and 1300 555 727 (Speak and listen), seven days, 24 hours a day

Other resources

2009 Bushfire Legal Help Handbook and factsheets on Family law, Fencing, Insurance and more at www.bushfirelegalhelp.org.au

Building Commission’s guide to a safe return to your property: www.buildingcommission.com.au

Department of Primary Resources Recovery after fire: Practical steps for landholders: www.dpi.vic.gov.au (See Agriculture > General farming > Bushfire recovery)

Click here for information about bushfire recovery.

Department of Sustainability and Environment: www.dse.vic.gov.au (see ‘Property, Titles & Maps’ and ‘Fire and other emergencies’ on the homepage)

Fitzroy Legal Centre’s Law Handbook factsheets on building or renovating and living in the community at: http://www.lawhandbook.org.au/fact_sheets/