The Importance Of A Pre-Settlement Inspection

You do not have the right to complete the Inspection on the day of settlement, despite this being the most likely day that the Vendor will have moved out of the property.  Your Inspection must be completed prior to the day of settlement.

What to look for?

It is important to check the condition of the property and the chattels as listed in the Agreement.  The property should be in the same condition as it was when the Agreement was signed. 

You should check that the chattels listed in the Agreement are the same model or type as agreed, and in “reasonable working order”.  There have been instances of vendors replacing chattels with cheaper versions when leaving.

What if you find damage?

You must tell your solicitor immediately.  While you will not be able to cancel the Agreement, you will have a right to a claim for compensation to be served on or before the last working day prior to settlement date.   There are a couple of possible resolutions that the solicitors for the Vendor and Purchaser may negotiate.  A reduction in the purchase price or the withholding of funds while repairs are undertaken is common.

In our view, completing the Inspection is imperative and we recommend that you complete it no later than two days prior to settlement. If you find that there is damage to the property or that the chattels are not working, it is much easier to deal with these issues prior to the day of settlement.

The above information is of a general nature only. You should contact our firm for advice relating to your specific circumstances.