A pre-settlement property inspection, also known as the final inspection, is the opportunity available to the purchaser of the house, to make sure that everything in the house is in the right order, before the final payment is made, i.e., before settlement day.
Most importantly, a pre-settlement property inspection is the opportunity for the purchaser to check whether the property is in the same condition, as it was when the contracts were exchanged. The purchaser can also thoroughly check whether all inclusions specified in the contract remain.
Things To Check During A Pre-settlement Property Inspection
Some of the things that are usually checked during pre-settlement property inspections include: –
- Plumbing
- Lights and electronics
- Water heaters
- Air conditioners and heaters
- Checking for pests
- Appliances
- Curtains and blinds
- Pools and spa filters
- Windows and glass
- Smoke alarms
- Door handles and locks
Additionally, it is the responsibility of the purchaser to check whether the property includes all the items that the vendor said they would leave, as mentioned in the contract of sale. These items are termed as inclusions.
Things To Look For In Detail
Damage to Property
If there is any damage to property, including damage to walls, and floors. Once conveyancers help buyers with the purchase of the house, they can also assist with ensuring that the buyers are aware of the things they need to inspect.
Fixtures
Fixtures that are permanent such as carpets, windows, doors, curtain tracks, smoke alarms, electrical connections, and plumbing connections must all be present, and in good condition. Other appliances detailed in the contract of sale must also be present.
Wear and tear
It is not the obligation of the vendor to clean the property, however, the property must not show excessive wear and tear signs. Naturally, it is also advisable that the property be kept tidy. For instance, incase of property with lawns, it is the obligation of the vendor to keep the lawn within council-approved limits.
Non-fixtures
All removable furniture are non-fixtures. This could include appliances, rubbish, and any other such item. They should not be included in the property, and should be removed before settlement day.
Any damaged appliances
Fixed appliances like cooling systems, and heating systems must be in working order.
Importance Of Pre-settlement Property Inspection
Generally, after the exchange of contract between the buyer and vendor, a settlement period can last anywhere between 30 to 90 days.
In certain cases, someone might be occupying the property during the course of the settlement period. Especially in this case, it becomes more important to conduct a pre-settlement property inspection. By doing so, the purchaser can thoroughly check if the property is in its agreed-upon conditions.
If the contract obligations are not met, the purchaser needs to notify the vendor, and any issue that has been identified during the inspection needs to be addressed/fixed before settlement day.
Who Can Inspect And When To Organise An Inspection?
Who?
To inspect the property, the purchaser should go with a witness. The witness can be the real estate agent, or conveyancer.
When?
In Australia, each state has different rules around these inspections. But as a thumb rule, it is important to note that purchasers should carry out property inspections several days, and at least a week before settlement.
This is to ensure that the vendor has ample time to make all necessary repairs and address all issues that come up during a pre-settlement property inspection.
During the inspection, the purchaser should carry the contract of sale, to cross-check whether all inclusions are still in the property, as agreed to by the parties. Similarly, having the contract of sale will help both the purchaser and the vendor to check if all exclusions have been removed from the property.
What To Do If Issues Arise?
Minor issues
If the purchaser spots issues during a pre-settlement property inspection, they need to make sure that they inform their solicitor or conveyancer.
They will then try to negotiate with the vendor, as a special condition in the contract, making sure that the vendor fixes the issues immediately.
After this is done, the purchaser must organise another inspection to check if all the issues have been corrected, and all necessary repairs have been made.
If the purchaser still finds issues in the second inspection, the vendor may be liable to offer a price reduction to the purchaser.
Major issues
In case the purchaser finds major issues, it is advisable that they click photos during the inspection and notify their solicitor, so the solicitor can explain all the rights that the purchaser has under the contract of sale.
Depending on how negotiations go, the purchaser can either delay the settlement, or negotiate that some funds be withheld during settlement.
Additional Information
To gain an understanding of the contract of sale, given below is the list of documents that the draft contract must include, as stated under Section 52A of the Conveyancing Act 1919.
- Property certificate
- Planning certificate issued by the local council
- Drainage diagrams
- Any dealings related to the property which are related to easements, or restrictions on the use of land
Importance Of Legal Guidance From JB Solicitors
When dealing with the purchase of property, you must be feeling stressed about the numerous things that go into this process.
Especially in cases where the purchaser is a first-time home buyer, the stress and anxiety around settlement can be overwhelming.
The conveyancing services provided by JB Solicitors will help all purchasers in navigating through the otherwise complicated process of buying property, completing a pre-settlement inspection, and completing all processes involved for settlement day.
We have fixed-fee pricing and a money back guarantee, and are always committed to using our expertise in solving all your legal troubles.
Contact our team of friendly property and conveyancing lawyers today, and have a confidential discussion on all matters related to purchasing property.
