The deal is done, the contract is signed and, apart from moving in, it’s time to relax. Not necessarily.
The most gruelling part of your property search may be over, but that doesn’t mean you’re in the clear.
Problems may still crop up between signing the contract and settlement, when you physically take ownership of your new home.
A bungled settlement is a major inconvenience and can leave purchasers liable for significant financial costs, including the forfeit of their deposit and the loss of the property.
With that in mind, here’s a guide to common pre-settlement problems and the best ways that purchasers can avoid – or resolve – them.
The best defence
Under the terms of a standard contract of sale, a vendor must deliver the property to the buyer at settlement in the same condition it was in on the day of sale, except for fair wear and tear.
This begins early — well before auction day, private sale negotiations begin, or signing the contract of sale — with the commission of a professional building inspection report
If you sign a contract without checking the condition of the property, under the age-old legal notion of “caveat emptor” (buyer beware) you’re stuck, regardless of what turns up after taking possession.
Put simply, without a pre-purchase building inspection, most buyers won’t know if the roof leaks, the foundations are cracked or the plumbing and electricity is on the fritz.
Missing and damaged fixtures and fittings
Most pre-settlement disputes relate to a property’s “chattels”, which are the permanent fixtures and fittings. These typically, but not always, include: appliances, carpets, drapery/blinds, clothes lines, TV aerials, awnings, and light fittings.
A correctly prepared contract of sale should detail exactly what chattels will pass to the purchaser and specifically list those the vendor will remove.
Apart from using the final inspection to ensure all the fixtures and fittings are still in place, a buyer should take this opportunity to test that they do, in fact, work
“You should turn on the odd tap, test the lights, run the dishwasher or washing machine for a few seconds to make sure everything is in order,” says buyer’s advocate Chris Koren of Morrell & Koren.
“If you find that something isn’t, bring it up right away.”
During the final inspection, a building inspection report and photo documentation play an essential part in determining whether any major damage has occurred since the contract was signed.
The key here is to look for major new damage — sizeable holes or gouges in the walls and floors, broken windows, etc — that clearly weren’t there previously.
Under the contract of sale, the vendor is protected from damage claims that arise from “fair wear and tear” on the property.
Understand that when people are moving furniture out there is going to be a little bit of damage, so don’t start getting hung up on scuff marks. It’s not a reason to complain, much less to delay settlement
Any major new damage should be brought to the attention of the vendor immediately, preferably by your solicitor contacting the vendor’s solicitor and agent.
If they are reasonable, the problem can be fixed before settlement or they might agree to pay some sort of compensation.
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