Who gets & pays for what in a long term s/ment?

Viewing 4 posts - 1 through 4 (of 4 total)

HappyHomes
Participant
@impatient
Join Date: 2006
Post Count: 34
May 23, 2006 - 7:22 pm
I have just sold a place on a long term s/ment, with the new purchaser moving in under a “licence agreement”, where by he has to pay all outgoing costs plus licence fee every week (note: this is NOT rent).
My 2 burning qu’s are:
A) How will this affect insurance? Who is responsible if something goes wrong? And who pays the insurance?
Do I still get to utilise equity & depreciation over that term?
Thanks in advance
HappyHomes | HappyHomes
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Merrianne
Participant
@merrianne
Join Date: 2004
Post Count: 17
May 24, 2006 - 12:50 am
generally the entity who owns the building is responsible to take out the insurance. the entity leasing the building is responsible to insure their business. In a commercial situation the entity renting the building may the obliged to pay the premium it all depends in what is written in the lease
Merrianne Black
Authorised Representative
Suncorp Insurance
mathewc73
Participant
@mathewc73
Join Date: 2005
Post Count: 241
May 24, 2006 - 2:43 am
In the license I have setup (for access to part of a building) the insurance must be taken out by the licensee (incase they cause damage or injury). But I still have overall building insurance becuase its not worth loosing $100,000s of dollars in a dispute if it ever came up.
I agree you should take out building insurance (if its not clear in the license).
Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
May 24, 2006 - 9:45 am
You should both probably have insurance. Who owns the building? You do still as you have your name on title, but the other party has purchased it from you, so they have equitable interest. They would want to protect their asset and you your asset. Not worth worried about a few hundered $$$ – if that.
Can you use the equity? Probably yes, but you will be discharging the mortgage on the property at settlement, so you won’t have much time!
Terryw
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Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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