This is important because the contract states the Purchaser to be at risk. Title, however, is in the name of the Vendor until the transfer is lodged, so it is important that the Vendor's interest be insured as well because it remains their property until the transfer takes place and the money is paid. Not only does this apply to fire insurance but liability insurance as well. If an accident occurs on the property on the Completion Date, the Occupiers Liability Act can impose financial responsibility upon the owner whoever that may be at the relevant moment in time. It is always a good idea for parties to a real estate transaction to have a contingency plan.
Vendors often depend upon sale proceeds for concurrent purchases.
Failure of these funds to flow can result in liability for breach of the subsequent purchase contract. Purchasers are expecting a place to live. This may be delayed in cases of foreclosure sales or new construction. It may be impossible in case of fire. Please call or e-mail me with questions or comments you might have.