Pre-settlement Inspections

House in a shopping trolley

If you’ve purchased a property you’re entitled to inspect the property up to a week before settlement. It is highly recommended that this be done as close to settlement as possible. Make sure you arrange the inspection with the real estate agent well ahead of time so you can do it when most convenient to you.

How many inspections can I do?

You have the right to only one final inspection however if a problem is found and is to be rectified then you are entitled to inspect the property a second time just to ensure this has been done.

What should I be looking for?

The property is expected to be in the same state as when you first made the offer to purchase but “allowing for fair wear and tear”. What this means is that if you first looked at the property three months ago it is acceptable for it to look like someone has been living there for three months (even if the property is vacant).

There is no obligation for the vendor to thoroughly clean the property. They don’t have to steam clean the carpets, wash the skirting boards or mop behind where the washing machine used to be, for instance. Saying that though, it shouldn’t be an absolute mess unless it was expressly communicated that it was to be sold like that (for instance a property that you would expect to be demolished or an old house sold at a lower price because of the state it is in).

Check to make sure nothing is damaged (that wasn’t already damaged before). Make sure rubbish has been removed. Make sure the vendors or tenants have actually vacated.

What is a fixture?

The rough answer is anything that is “fixed” to the property and can’t be easily removed. The dishwasher and stove can’t be removed easily because of plumbing and gas connections. The clothes washing machine however can be removed easily. Lightbulbs can be removed but light fittings must stay. Curtains can be removed but curtain railings can’t. Carpets have to stay but rugs can go.

These are some of the issues that can arise at pre-settlement inspections:

Lawn overgrown

The lawn is expected to be kept at a length that complies with the local council regulations. It is acceptable if it is more overgrown than the initial inspection as long as it abides by council regulations.

Rubbish/furniture left behind

This is a common one. Unless expressly specified in the Contract, non-fixtures including furniture and rubbish are to be removed prior to settlement. If things are left behind, contact Lake Streetand request that they communicate with the vendor’s solicitor to ensure those items are removed.

Damage to the structure (eg. holes in plaster, broken tiles, etc.)

This comes down to two simple questions. Was the damage already there at the first inspection? And if so, was there a Special Condition in the Contract stating that the damage was to be repaired?

If the damage was there at the first inspection then there’s really nothing that can be done unless there is a Special Condition requiring repairs.

Appliances not working

Another common issue. If a fixed appliance such as a heater, aircon, rangehood or similar isn’t working at the inspection, again communicate with the agent to request it get fixed. If it can’t be proved that the appliance wasn’t working originally and there is no special condition to say it should be working then the vendor may refuse to fix it.

Often the vendor will have cancelled the electricity and gas connections prior to the inspection so it’s advised to have them connected in your name in advance.

Remote controls and/or manuals missing

There is no obligation on manuals being supplied and often the vendor advises that remote controls are lost. Most appliance manuals can be downloaded from manufacturers websites and replacement remotes may need to be ordered directly from the manufacturer as well.

Holes left in the wall after taking down TV mount

Settlement must proceed. TV mounting is a fixture and should stay. This should have been address in the sale Contract.

What Can You Do About It?

Firstly, talk to the real estate agent about it. Some agents are really helpful with contacting vendors and discussing the problem. A lot of times the vendor is aware of the issue and is already in the process of rectifying it.

Next, talk to your solicitor. Give them details about what the issues are. They can advise whether this is something that can be pursued and then can contact the vendor’s solicitor prior to settlement to request that it be fixed.

There is a General Condition in standard Contracts which provides for an amount of up to $5,000 be held back from the vendor and paid to a third party for repairs, provided the purchaser also pays an equal amount to the third party. Settlement can then proceed without delay and the dispute be resolved afterwards. Just be aware that this option does tend to be costly so you need to weigh up if it is worth it.

If there is a special condition in the Contract which specifies that a certain, or all appliances be in full working order then settlement can be delayed until that appliance is fixed. However both parties may prefer to withhold money, settle and sort the problem out after.

Key Points

– Make sure to arrange the inspection time well in advance

– Ensure electricity and gas are connected in time for the inspection so you can test appliances

– Check with the agent that the problem is not already being dealt with

– Don’t be scared to ask for a second inspection to check if something has been rectified

– Remember the real estate agent acts for the vendor not the purchaser

– Any Special Condition in the Contract, if not fulfilled, can hold up settlement without penalty until it is rectified.