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Evaluation of the statement | Purchaser and Vendor

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Added on  2019-11-19

Evaluation of the statement | Purchaser and Vendor

   Added on 2019-11-19

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Evaluation of the statement | Purchaser and Vendor_1
PROPERTY 2IntroductionEach year, with the onset of summers, a catastrophic event which looms in Australia is the bushfire and the resultant destruction and damage to the property, which can have an impact over the exchange or the competition of the contract for sale of the residential property (Paine Ross & Co, 2013). In the nation, the Conveyancing Act, 1919 applies. Particularly section 66J(2)of this act relates to this aspect whereby the land which is damaged after making the sale contractof land is damages substantially, in case the damage results in the land being materially different from the one where the purchaser contracted to purchase (NSW Legislation, 2011). In the following parts, this particular section has been analysed in the context of two cases of Bakhos v Fenner & Anor [2007] NSWSC 641 and Urban House v Purnell Bros [2007] NSWSC 1248. Substantial Damage to PropertyIn such cases where the property damage is deemed to be substantial, the buyer gets the option of getting the contract rescinded within a period of twenty eight days from the time the buyer becomes aware of these damages (Barcelon, 2016). When such happens, the buyer is allowed to get their deposit back and he is also released from the obligations which are born out of that particular contract. However, there is an exception to this particular right and lies in the fact that the damage is a result of negligent or wilful act or an omission on part of the buyer (Paine Ross & Co, 2013). Due to these reasons, a protection is provided to the seller where the buyer is granted early possession and after the buyer takes the possession but before the completion is done by the buyer, a major damage is caused to the property. Though, in case the damage is major and the buyer wants to still go ahead with the purchase, the completion or
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PROPERTY 3performance of contract cannot be forced by the seller in case it was a justifiable or inequitable thing to require the completion of sale on part of the seller (Butt, 2010). When a residential property is sold, the risk relating to the property is not passed to the buyer till the time the property is completed. In other words, the seller remains responsible for the property and has to retain the insurance till the time the sale is completed. The only time where this particular position is differentiated is when the buyer takes an early possession of property. And in such cases, the risk of property is taken by the buyer from the very day of their possession. In other words, the buyer would require insurance from that particular date (Butt, 2010). In cases where a damage to property is attained after exchange; however, when this happens before the completion of the options which are available to the parties, it has to be governed by the provisions covered under Part 4, Division 7 of this act and is dependent upon thedamage being categorized as being substantial or not (Paine Ross & Co, 2013). Section 66J(1) ofthe Conveyancing Act, 1919 defines that for the purpose of this division, the damage has to include destruction, land includes fixtures and buildings and sale includes exchange. Subsection 2 of this section provides that where the land is damages once the contract for selling the land has already been made, this land would be deemed as been damaged in a major way where the damage results in the land being materially different from what the purchaser had wanted to or contracted to purchase (Jade, 2017). Substantial damage is referred to as the damage through which the land is rendered materially different from the one which the buyer contracted for buying. As stated earlier, the land includes buildings and the other fixtures. Practically, the residential dwelling which is
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