So you’re buying vacant land, or have purchased your vacant block already. No buildings, no problems – right? Unfortunately, it might not be that simple.
Even if your vacant land has nothing on it but a few tufts of grass, property ownership risks can still arise. Here are some of the common risks to consider, and the two insurance types designed to provide cover against these risks.
Risk area #1: Public liability on vacant land
As the owner of a vacant block in Australia you’ll be responsible for keeping your land safe. Under common law, you could be held responsible for any injury, death or damage that occurs on your property. If someone takes a shortcut through your vacant block on their way to the shops and happens to get injured, it could leave you open to legal action. It may seem hard to believe, but even an illegal trespasser could have rights to compensation if they get injured on your land.
What type of insurance to consider:
Of course, good fences and regular block maintenance will go a long way in keeping everyone safe. But you may also like to consider public liability insurance, known widely as vacant land insurance or vacant land liability insurance. This can provide protection in the case of injury, death or property damage on your vacant land. Note that vacant land insurance is different to vacant property insurance, which is designed for unoccupied buildings.
Risk area #2: Property ownership risks
There’s a handful of property ownership risks that can arise with almost every type of property – not just vacant blocks. Although these risks don’t happen for every vacant lot owner, if they do they can be costly and inconvenient. They can include:
• Boundary fences or neighbouring structures that are found to extend onto your land, and prevent you from using your land fully.
• Discovering only after settlement that you can’t use your land for residential use as you previously thought.
• Losses due to errors contained in certain public property searches, carried out when you purchased your land.
• Unknown and outstanding rates, charges, land tax or strata fees owed by the previous owner which were not adjusted correctly by your conveyancing practitioner.
• A fraudulent mortgage taken against your land, or fraud that might result in your land being sold to another owner.
What type of insurance to consider:
If you’re looking to gain protection against the issues listed above such as planning and zoning issues, incorrect boundaries and encroaching structures, then you might like to consider vacant land title insurance. Title insurance for vacant land requires just one single premium with First Title before or after you purchase, and will cover your property for the rest of the time you hold ownership. Cover also applies while your beneficiaries own the land. In the case of a successful claim, the First Title team will help you to clarify the issue and cover costs. As such, a successful claim could potentially save you thousands.
Your vacant land can hold lots of opportunities and excitement, but it can be a great idea to consider the risks too. You can get a quick quote in just a few minutes for vacant land title insurance with First Title, to see if our cover is right for you.
