Pre-Settlement Inspection: What Am I Entitled to?

one2three on 14/05/2018 - 14:10

Hi guys,

I’ve just done a presettlement inspection and found some problems (leaking tap, power socket not working, light in the oven not working etc). The vendor’s agent is pretty much saying tough luck which I feel is unfair and makes the presettlement a bit pointless if they’re not willing to fix these issues.

Also the vendor’s left a lot of their stuff in the wardrobes etc and the agent said “the vendor didn’t realise the presettlement was today”.

Lawyer agrees presettlement is actually pretty pointless, basically just checking to see the house is still standing.

What are my rights? Am I expecting too much?

Home & Garden Property

Comments

  • follow on 14/05/2018 - 14:15
    +6

    Ask the lawyer?

    • boomramada on 14/05/2018 - 14:20
      +1

      Yep, look like OP's lawyer is useless.

      • djkelly69 on 14/05/2018 - 14:37
        +2

        Lawyer's advice is spot on.

      • HeWhoKnows on 15/05/2018 - 21:02

        According to OP - yes.
        Maybe OP should sack his lawyer and employ you!

  • garetz on 14/05/2018 - 14:20
    +3

    Presettlement gives you a way out of the contract, as long as you are willing to press them you can get a refund for things that dont match what it states in the contract, or you can threaten withdrawal too. They may call your bluff though, in which case you can either go ahead or pull out. Your solicitor should be able to give you more info, but sounds like they couldnt care less about it, what are you paying them for if they are unwilling to do their job of giving you real advice.

    • djkelly69 on 14/05/2018 - 14:36
      +3

      Presettlement gives you a way out of the contract

      Only if the contract contains an essential condition/term saying the property will be left in X condition (which is very unlikely). If there is anything in the contract about the condition of the property (which itself is unlikely in NSW) it would likely be a warranty rather than an essential condition, meaning termination or rescission is not an option.

      OP, assuming there is nothing special in your contract to say something had to be done before completion or it had to be left in a certain condition, then there is no obligation on the vendor to do anything other than give you vacant possession and leave the property in the same condition it was at exchange of contracts.

      • SlickMick on 16/05/2018 - 11:29

        or if there is anything not as it was when you signed contract. If a light was working and now isn't, you have an out.

        The problem is, it means there needs to be just as thorough preliminary inspection, or vendor can just say "it never worked".

    • [Deactivated] on 14/05/2018 - 23:15

      It really doesn't give you a way out of the contract unless something extraordinary that was not visible during the inspections is found. I was selling a house and the buyer insisted on a building inspection (by a professional) the real estate agent said unless they found something really bad that was way out of character for the age of the house (50 years) then they really cant get out of it.

      The takeaway from this is to do the building the inspection before you sign an offer to purchase if they will let you ( they don't have to), and a smart estate agent wouldn't let you because if the sale falls over or something and he sees the building inspection which contains important information about the condition of the house then he is obliged to tell prospective buyers.

      • SlickMick on 16/05/2018 - 11:39

        The building inspection is different from pre-settlement inspection.

        You'd have to word the contract pretty badly not to be able to get out of purchase on an unsatisfactory building inspection. I'd expect every house will have enough wrong with it to void the contract. But who puts a contract on a house with a plan of getting out of it?? It covers you if there's more wrong than you expected: you then ask for a discount or walk away.

        I would never pay for a building inspection before the contract is signed. There's no point in spending money on a house you aren't buying, and if there's no contract you aren't buying it yet.

        I doubt I'd ever buy a house without a building inspection after the contract though. I've always either got a few things fixed or gotten a discount that more than pays for the inspection.

        I'd not sure that agents have to reveal everything they know. As far as I know it's "buyer beware".

    • HeWhoKnows on 15/05/2018 - 21:03

      Yes the type of inspection OP is doing is a pre-purchase inspection which should be done before signing the contact.
      Once the contract is signed its all over.
      Unles there is something significnatly different or items that must be removed by the vendor (as per vacant possession) there is nothing to discuss.
      OP should just sort out these minor things himself or risk being hit with a notice to complete and a penalty!
      OP should just move on and stop wasting time

  • dcep on 14/05/2018 - 14:20

    is this subsale or new build ?

    if new build, you can demand in writing to get it fixed 'afterwards', but you still can't delay settlement

    if subsale , forget it

    • boomramada on 14/05/2018 - 14:29

      for subsale, don't you have to do a building inspection? if leaking tap, power socket not working, light in the oven not working etc in part of the inspection, you can ask seller to fix it? or back off the settlement, based on how bad the issues are or renegotiate the price.

      I know in new build this issues must be fixed.

      • dcep on 14/05/2018 - 15:01

        yes buyer has the power right up until before the contract went unconditional

        after that, anything that've been missed/not raised prior … just suck it up and proceed with settlement, or lose the deposit

    • thatonethere on 14/05/2018 - 14:44

      Sounds like re-sale if vendors clothing is in there…

    • HeWhoKnows on 15/05/2018 - 21:09

      Did you read the post!

  • Freitag on 14/05/2018 - 14:43
    +10

    A Pre-settlement inspection is just to make sure the house is in the same condition it was in when you inspected and put the offer on the place. If those items were broken at that time, then that is what you have bought.

  • chumlee on 14/05/2018 - 14:56
    +3

    A pre settlement is to make sure the property is in the same condition as purchase day. Do you have any proof power socket was ok on day you purchased the property?

    As for leaking tap and oven light, owner can claim it's wear & tear. Also, you going to risk holding up settlement for minor issues?

  • Skramit on 14/05/2018 - 14:57
    +3

    In my experience, pre settlement inspections are best utilised to greet the former owners and get the low down on how the various bits and bobs work in the house. Like where the gas meter is, water meter, any tricks to make certain things work. Handover of manuals for dishwashers etc. Very brief on each item but it's always appreciated.

    It's also a quick once over to ensure there's no major damage since the purchase like a leaking roof or hole in the wall, broken window etc.

    Whinging about leaky taps etc is usually pointless - sorry OP. That would normally be "wear and tear".

    • HeWhoKnows on 15/05/2018 - 21:11
      +1

      Good luck ! The vendors are never present. Only the agent. But doesnt hurt to ask.

  • Randxyz123 on 14/05/2018 - 15:19
    +1

    Leaky taps is a easy DIY job. Power point I’d demand them to be fixed…

    Oven light - meh unless the oven looked like it needs replacing.

    • ESEMCE on 14/05/2018 - 15:54
      +8

      And none of these "issues" is worth losing your deposit over.
      Total repair cost of $200 maximum.
      Just suck it up, welcome to Home Ownership… You'll have way bigger problems over the coming 5 years than these tiddlers.

      • Gandalf the Thrifty on 14/05/2018 - 17:16

        Electrician replace powerpoint could be $200 with their minimum call out rubbish

        • follow on 14/05/2018 - 17:28

          Post it on airtasker

    • HeWhoKnows on 15/05/2018 - 21:12

      Yeah Right. OP is not buying a new property.
      OP is buying as inspected. The end.

  • CLoSeR on 14/05/2018 - 16:06
    +2

    Minor issues you have identified are easy to fix and cost very little.

    Homes cost money to maintain; these small items should not be of concern.

  • Typical16-bitEnjoyer on 14/05/2018 - 16:14
    +5

    Yes, you're asking too much. This is stuff you're supposed to check BEFORE you make an offer. Even then, this stuff is trivial. Nothing is a "major" fault so you cannot delay settlement. I doubt you noted these items were working or not working when inspecting the property so you have no leg to stand on there.

    I've been to a pre-settlement where it was discovered the vendor had:
    a. pulled up all the carpet in the loungeroom
    b. knocked down a wall leading to the loungeroom
    c. pulled up all floorboards and removed all the benches in the kitchen.

    Vendors excuse? They were in the middle of "renos" when they put the place up for sale so decided to "try and finish them" unsuccessfully before settlement.

    Now this where the pre-settlement inspection can save you ;)

    • HeWhoKnows on 15/05/2018 - 21:13

      Ooooooohhhhhhhhhhh

  • QW3RTY on 14/05/2018 - 16:21
    +2

    If you're buying a preexisting property, most likely you're buying "as is, where is".
    As you've agreed terms, pre-settlement inspection is basically for you to go around with a notepad, fill out a list of defects that you'd like remedied, and send that list to your handyman/contractor to rectify at your own cost, if you so wish.

    You've agreed to buy the house from the vendor at a certain price in it's current condition (assuming it's preexisting). Welcome to home ownership! You didn't think the pocket book goes away after the auction, right?

  • one2three on 14/05/2018 - 17:20
    +1

    Thanks for all the input guys!

    All these posts online telling you what to check at your pre-settlement always talks about how you should check for any leaks from taps/sinks, check that the appliances are working properly, power points work etc etc but it seems there’s really no point checking those at all!

    • djkelly69 on 15/05/2018 - 00:11
      +1

      I know it is not of much use to you know, but for future reference and for anyone else reading this, you are better off checking for these things at a pre-exchange inspection rather than pre-settlement. That way you have a reference point for what the condition of the property should be at settlement, and more importantly, if you discover anything major such as appliances not working you can still negotiate on these items before the contract is binding (eg. request a condition saying they will be working on settlement, price reduction, etc).

      Also note that the obligations on the vendor can vary from state to state, and also depend on the conditions in the contract.

    • HeWhoKnows on 15/05/2018 - 21:16
      +1

      Thats pre-purchase.
      I think you are getting confused.
      Its all too late for that now.

  • Gandalf the Thrifty on 14/05/2018 - 17:22

    You sign your offer pending building/pest inspection.( & finance)
    After that you can ask to reduce price or get fixed if they find any major issues. Vendor can say no though

    • coin saver on 14/05/2018 - 18:07
      +1

      "Vendor can say no though" Yes the vendor can say no to a price reduction or repair but if your contract is done properly you can cancel the contract.

    • Euphemistic on 15/05/2018 - 10:27

      By pre-settlement stage you are well past that though. It's a last minute inspection to make sure the house is in the condition it was when the contracts were exchanged, fair wear and tear excluded.

      I've bought three houses, and in each, I found that there were minor things that the building inspection didn't pick up. Leaky taps were one of those, but easy to fix anyway so not a deal breaker. Stuff like a missing fixtures is a bigger issue.

  • Cheeper on 14/05/2018 - 18:29
    +1

    Unless you specified in your agreement to purchase that certain items should be attended to then it is just too bad.
    Regardless, the items you mention are very petty and would be common with any established property purchase.
    It is used… nothing is perfect.

  • [Deactivated] on 14/05/2018 - 23:56
    +1

    I'm impressed that you went to that much detail in your PSI.

    • HeWhoKnows on 15/05/2018 - 21:01

      Very funny
      OP should work as a property manager.
      Most of them wouldnt notice any of the issues OP found.

  • theguru1 on 15/05/2018 - 07:49

    Having been through a settlement with issues unless the vendor is willing to correct there is little you can do. You certainly can not avoid the sale.
    In most cases the cost of getting your conveyancer/ lawyer involved far outways the possible benefit.

    If it is minor, like the items stated,try to get the agent to motivate the vendor, otherwise just move on.

  • HeWhoKnows on 15/05/2018 - 21:00

    OP should just listen to his lawyer. OMG Thats what you pay them for.
    OP has been told already by 2 professionals. Why are you asking us?

    What are you going to do….Fire your lawyer and employ one of us?
    Yeah right. Good luck!
    Just move on. The issues are insignificant.
    By the way, you better check if the toilet is flushing too.

    And did you do a pre-purchase building inspection and pest inspection?
    If not, do it now so at least you know what problems you bought yourself.

  • ajwhi on 15/05/2018 - 21:39
    +1

    I just bought my first home and was surprised with a few things that we thought was commonplace but apparently not.
    For example apparently nobody measures the property they're buying to make sure that what is on the title matches in real life.

    More applicable for you, unless you have evidence of these things working when you made your offer and now no longer working/are in different condition, then there is really nothing you can do and have to take the property as is.
    For us, there was water damage on the living room roof, which was there when we purchased, and wasn't significantly different enough when settlement came for us to get the vendor to pay for the repair or negotiate knocking money off the final sale price.

    Unfortunately vendor's are more protected that purchasers, at least that's the message we got from our conveyancer/real estate agent and bank.

    Goodluck with the house, in the end they are minor things that you can fix up. If it's the right property for you, go for it!

  • SlickMick on 16/05/2018 - 12:08
    +1

    There seems to be confusion as to whether this is a building inspection whilst the contract is still conditional, or a pre-settlement inspection after the contract is unconditional (i.e. within days or hours of settlement).

    If the inspection date has not past, you can totally request that any matters get rectified, or get a discount on the purchase price, or walk away if you aren't satisfied with the response. I doubt you would lose any part of your deposit in any state.
    It's a bluffing game. The vendor/ agent will decide whether you're likely to cancel the contract over it, and agree to your terms if they think you would. If you paid for the inspection, you're "invested", so that adds leverage to the vendor.

    I recently requested about $20,000 worth of matters be addressed, but accepted a $3,000 discount. Vendor won that one!

    If it is in fact a pre-settlement inspection, then you can only address anything that isn't as per contract, which includes the state of taps, power sockets etc at time of contract, and also the removal of rubbish. This is where you need a better lawyer. A good lawyer will withhold funds from settlement until matters get addressed, or threaten to delay settlement, or whatever.

    This same purchase, at pre-settlement inspection the vendor couldn't provide all the keys to the house, and many locks didn't work properly. I told the agent they would have to resolve before settlement, but she knew I had a budget conveyancer, and by accepting the pitance discount I had revealed that I wasn't going to pull out, so she just shrugged her shoulders. Settlement went ahead, and I need to resolve the issues at my own cost. Vendor 2 me 0.

    But the house is good, so I'm happy too.

  • amberdreyer on 07/01/2021 - 20:11

    During this inspection with your builder, it is your responsibility to identify all of the defects and quality issues throughout your new home. Its difficult for home-owners without extensive building knowledge of the standards, and what to look for… Building supervisors have these handover inspections almost weekly, and know how to re-direct your attention away from issues, and keep you away from areas they know defects of quality issues exist. This is why hiring a house inspection specialist is really important. They will supposed to help you ensure that the defects are identified, documented and have actually been rectified. (Make sure to read reviews of them, first) See: https://www.correctinspections.com.au

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