If the property is damaged before settlement, the outcome depends on the extent of the damage and the terms outlined in the contract of sale. In most cases, the risk of damage passes to the buyer upon signing the contract, as per the doctrine of equitable conversion1.
However, if the damage is substantial, it may be covered by insurance or trigger specific clauses in the contract, such as a cooling-off period2 or provisions for renegotiation. Consult with a conveyancer when buying a property to understand your rights and options in such a situation.