The final inspection before settlement NSW is also known as a pre-settlement property inspection.
The pre-settlement inspection ensures that the property you bought is in the same condition as when you first saw it. This inspection happens before settlement day. This is when the real estate agent officially transfers the property to you after exchanging contracts.
It’s important to note that pre-settlement inspection procedures vary by state in Australia. In NSW, ideally, you should schedule this inspection about a week before settlement. This timeframe gives the seller enough time to address any issues you or your real estate agent may raise.
Take note, purchasers should not take the final inspection before settlement in NSW lightly. It is the only opportunity for the purchaser to check whether the property is in the same condition, as it was during the settlement date.
If the buyer doesn’t conduct a thorough inspection, they may risk seeing damages or bad conditions in their property later on or in the long run.
CHECKLIST: Pre-settlement Inspection Checklist NSW
Important Documents in Sales Contracts
A contract of sale can contain a variety of documents. According to Section 52A of the Conveyancing Act 1919 NSW, there are relevant documents for the contract of sale. This is a strict requirement under the Act. Let’s look at these documents:
- Planning certificate by local council;
- Property certificate;
- Diagrams and prints; and
- Documents related to any restrictions on land or any easements on that land.
Some purchasers may also opt to buy properties sold off the plan. This condition will also require additional documents which should include a Disclosure Statement which contains key information. Let’s look at additional documents that are required when buying properties off the plan:
- A draft plan from a registered surveyor
- Proposed schedules of property finishes
- Any dealings proposed to be lodged with the plan
- Draft by-laws. By-laws are rules that buildings or complex residents must follow to ensure fair treatment for all. Purchasers may ask for this from their real estate agent and cross-check with current building or complex owners, residents and tenants.
- Draft management statements or proposed development contracts (This is for lots in a proposed community, precinct or neighbourhood scheme)
- Draft strata development contracts (This is for properties that comprise or include a lot in a proposed development scheme)
- Draft building management statements
More information about plan types: Plan Types – NSW Land Registry Services
Attending the Final Inspection Before Settlement NSW
The settlement period between signing the contract and ownership transfer (typically 30-90 days) often coincides with the property being occupied. This can raise concerns about potential or significant damage.
The final pre-settlement inspection in NSW addresses this by allowing you to verify the property’s condition. This inspection ensures that:
- The property remains in the same state as when you agreed to purchase it.
- The previous occupants have vacated completely.
- All agreed-upon fixtures and fittings are present.
- The seller has fulfilled all contractual obligations.
You can ensure a smooth transition into your new property if you thoroughly check these aspects.
What Should I Look Out for During the Final Inspection Before Settlement NSW?
Before you attend the final inspection before settlement NSW, it is important to be aware of things that you need to look out for. The purchaser will need to pay the costs of repairing the damage if they don’t notice it during the inspection. Did you already sign the contract and suddenly see a broken pipe under your sink? That means the seller is not liable for paying the costs for that damage.
Now, this section will provide an outline of all the important things that you need to keep an eye out for in your pre-settlement inspection checklist.
- 1. Damages
The first thing to check in a final inspection before settlement NSW is property damage. You need to check if there are any significant impairments in the exteriors or interiors of the house or property. This can include things like a hole in the wall, broken window panes, or damaged kitchen sinks.
You must look carefully, even for minor damages, as this will be your only opportunity to do so.
- 2. Condition of the House
Purchasers must make sure that the house is neat during the final inspection before settlement NSW. They should check for things such as waste disposal systems. For example, check if the house has bins for general waste as well as bins for green waste (organic waste such as grass clippings or biodegradable waste).
Inclusions and Exclusions as per Contract
Inclusions and exclusions fall under “special conditions” of the contract. These refer to items that need to remain in the house and items that need to be removed from the house, respectively. Always remember to double-check your contract if this special condition or if there are any clauses relevant to this.
Inclusions can include things like TV units and built-in wardrobes. Exclusions can include items like furniture, lighting, and the like, depending on the agreement that the purchaser and vendor have made.
The property must meet these special conditions, and the purchaser must properly check it during the pre-settlement inspection.
Most importantly, the purchaser must make sure that inclusions have been left behind and exclusions have been taken out. Moreover, they must carry out the sale contract during the inspection.
List of Items to Double-Check During Inspection
This checklist will guide you through your pre-settlement inspection in NSW:
Functionality Check:
- Appliances: Test all appliances in the house, ensuring they operate properly.
- Doors & Locks: Verify all doors function smoothly and locks operate securely.
- Lights & Electronics: Turn on lights and test electronics to confirm they work.
- Plumbing: Run water in all taps and showers, checking for leaks and proper drainage.
- Climate Control: Test air conditioning, heaters, and water heaters to ensure they function correctly.
Interior Features:
- Curtains & Blinds: Inspect curtains and blinds for damage or missing parts.
- Windows & Glass: Check windows for easy operation and any cracks in the panes.
Safety & Maintenance:
- Smoke Alarms: Ensure smoke alarms are present and functional in every room.
- Pest Control: Look for signs of pest infestation.
Additional Checks (if applicable):
- Pool/Spa Filters: For townhouses or bungalows, verify the pool or spa filters are operational.
What Can I Do If I Find Issues During the Inspection?
Purchasers may find some issues or damage to the property during their final inspection before settlement NSW. In such circumstances, they must inform the vendor or their solicitor.
The purchaser’s solicitor will then notify the vendor or their solicitor about the damages that they have come across.
It is the vendor’s responsibility to repair any damage before settlement day. The purchaser’s solicitor can negotiate with the vendor’s solicitor.
For example, if the vendor cannot make the necessary repairs before settlement day, the purchaser’s solicitor may negotiate an agreement to reduce the sale price. There may be a reduction of the sale price to compensate for the repair costs.
Accordingly, if the purchaser does notice damages or issues with the property, they may be entitled to a second pre-settlement property inspection. During the second inspection, the purchaser can check if all necessary repairs have been made.
Want a Successful Pre Settlement Inspection?
At JB Solicitors, our property lawyers and conveyancers can represent either the purchaser or the vendor of a property. Our expert lawyers can step up for purchasers who need help negotiating the sale price. Similarly, we also have the experience of representing vendors of property and property damage matters.
Conveyancing and pre settlement inspections can be stressful without the right legal guidance. Since different states have different laws and regulations, all parties must be aware of the laws that apply to their jurisdiction.
For this and all other purposes, you should seek legal guidance. If you have more questions about a pre-settlement property inspection, please do not hesitate to reach out to our team of lawyers.
Contact us today.
