Pre-settlement inspection rights refer to the right of the property purchaser to view the property before settlement occurs.
If you are about to purchase a property, you may be wondering what pre-settlement inspection rights you are entitled to and what you can and should do if you find issues with a property before settlement.
The following article is a must-read for anyone considering purchasing a property in Australia and what you need to know before taking the plunge and committing to a property.
What Are Pre Settlement Inspections?
Before discussing what pre-settlement inspection rights are, it would be helpful to discuss what pre-settlement inspections involve. Pre-settlement inspections in Australia, more commonly known as final inspections, are relatively routine before a property settlement.
In the typical case, a purchaser will have the right to a single pre-settlement inspection within three days before settlement. This pre-settlement, although not compulsory, is highly recommended as it can reveal circumstances about the property that can potentially add dramatic costs to make the property liveable or otherwise fit for the purpose in which you intend to make use of the property or land.
Why Should You Do a Pre Settlement Inspection?
As a purchaser of a property, you really should exercise your pre-settlement inspection rights before settlement. This is because a pre-settlement inspection allows the buyer to do a final review of the home. This ensures that the property is in line with expectations according to what was reflected in prior inspections before exchanging contracts.
You may be wondering, what could have changed since the last inspection of the property?
The answer to this question is – A LOT!
A common scenario is that the prior owner or occupants have been living in the property between the exchange of the contract of sale and the settlement. Accordingly, you should check that the property is in the same condition as when you signed the contract. Although it is a short period, valuable fixtures in the home may have been damaged during this time, or the vendor may not have rectified a defect that was required to be fixed before settlement.
A pre-settlement inspection is your final opportunity to inspect the property and ensure these issues are rectified before paying the balance of the purchase price.
How To Do A Pre Settlement Inspection?
To exercise your pre-settlement inspection rights in Australia, you will need to organise the pre-settlement with an agent within three days prior to settlement in the typical case.
Here are some details you should be looking for:
Any Damage: Have a walkthrough around the property and in the home itself and look for any damage that may have occurred since the signing of the contract. If you notice any new damage, such as a broken window, you should request that damage be fixed before settlement.
Inclusions and Exclusions: When you initially exchanged contracts with the vendor, you would have agreed on what items would be removed from the property and what would remain. For instance, standard items will usually remain in a property, such as a built-in barbecue, light fittings, or even curtains. However, if any of these items are listed as exclusions in the contract, the vendor is legally allowed to take them. The best thing to do in your pre-settlement inspection is to take a copy of the contract with you and use it as a checklist to ensure all the inclusions are there.
The Cleanliness of the home: At this stage, the property should be clean and ready to be moved into. If there is any rubbish or pieces of furniture left behind, you should request that they be removed before settlement.
Special Conditions: If there are any special conditions in the contract, such as a particular thing being repaired around the home, any renovation work, etc. You need to ensure that this specific condition has been complied with before settlement. If it has not, you should request for it to be.
What To Do If You Are Not Satisfied
If you have exercised your pre-settlement inspection rights in Australia and found significant issues, you should immediately let your solicitor or conveyancer know.
What your solicitor can do is negotiate with the vendor’s solicitor and reach an outcome that is fair and satisfactory for all parties. Depending on the circumstances, you may be entitled to delay settlement or negotiate for some funds to be withheld at settlement.
Importance of Seeking Legal Advice
When discussing matters such as your pre-settlement inspection rights, it is important to remember that although a pre-settlement is not required, it is highly recommended.
If you have any other property related questions, please do not hesitate to contact our team today. We are always happy to help.
Here at JB Solicitors, we’ll make the process as pain-free as possible. We have fixed-fee pricing for family law, giving you a clear sense of the costs from the start, and we will be sure to help you out every step of the way.
With years of experience under our belt, we pride ourselves on making each client’s family law experience as positive as possible.
Contact JB Solicitors today to speak with one of our friendly and experienced property lawyers.
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