One of the last boxes to tick before settlement day is the pre-settlement inspection. You’ll all be familiar with the concept and no doubt have had some interesting experiences. If the property is being sold with vacant possession, the agreement gives the purchaser the right to enter the property on one occasion to examine the property, chattels, and fixtures which are included in the sale, and the right to re-enter to check any work undertaken. These inspections must take place before (not on) the settlement date. Ideally, we suggest to our clients they do their inspection after the vendor or tenant has left the property. However, we appreciate this isn’t always possible given vendors and tenants often don’t move out until the settlement date.
So what’s the purchaser looking for?
In a nutshell, they’re checking the property is in the same condition as it was when the agreement was entered into, and the chattels and fixtures are still at the property and are in reasonable working order (unless the agreement stated otherwise). It will come as no surprise that cleanliness is often an area of complaint. Sadly, there’s no obligation on the vendor to clean the house before they move out and we know often the agent deals with left behind rubbish and furniture.
What do you tell the purchaser to do if there’s an issue?
The purchaser should contact their lawyer as soon as they can. There’s no right to cancel the agreement, but the vendor might be able to arrange for the damage or faulty item to be fixed ahead of the settlement date, or agree the purchase price is reduced to reflect the expected costs to fix or agree that part of the purchase price is withheld until the work is completed.
If there’s anything you want to check out, you’re always welcome to give one of the team at Studio Legal a call. We’re always happy to assist.