Are you ready to settle?
Topics covered in this article: Home Owners, Property
Your agreement went unconditional, all transfer documents have been signed, you’re ready to settle - but wait there’s more!
You may or may not be aware that you have rights of inspection before settlement. This is your chance to make sure the property you are buying, including chattels and fixtures, is:
a) In the same condition as when you signed the Agreement;
b) In reasonable working order; and
c) All chattels and fixtures included in the contract are present in the property.
This right must be exercised before the settlement date or taking possession. If you are buying a rented property and you wish to carry out an inspection, you should give at least 48 hours’ written notice before your planned inspection because your right of entry is subject to obtaining the tenant’s consent before entering the property.
So, you’ve done an inspection and have found the property has been damaged or the chattels are not in reasonable working order, now what?
The vendor is responsible for any damage that occurs between the signing of the agreement and the settlement date. They have an obligation to hand over the property, including chattels and fixtures listed in the contract, in the same condition as they were when you signed the agreement. This extends to security, heating, cooling, and air-conditioning (if included). However, it does not extend to fair wear and tear, which can be expected for an existing property and will not be considered ‘damage’.
You may have the option to cancel or continue with the contract and claim compensation depending on the nature of damage. You may have the right to cancel if the property is rendered ‘untenantable’ or if there has been a breach of warranty or misrepresentation. If damaged has occurred or the chattels included are not in reasonable working order, then you may have a right to claim compensation, or request that the vendor repairs the damage. Any claims for compensation must be served in writing to the vendor “on or before the last working day” prior to settlement. There is no requirement to claim compensation before settlement for breach of warranties however, it is prudent to serve your notice of claim on the vendor prior to the day of settlement especially when you have already found out that the vendor’s warranty has been breached.
If the vendor has agreed to repair the damage or rectify the issue/s, then you are entitled to re-enter the property to conduct another inspection.
There are various ways to negotiate and resolve these issues. We at Cooney Lees Morgan endeavour to explain to you the process of conveyancing and assist you along the way.
Please contact a member of our Property & Development Team on (07) 578 2099.