Pre-Settlement Inspection (Apartment off The Plan, in Melbourne, during COVID-19 Restrictions)

this is us on 12/10/2020 - 12:35
Last edited 14/10/2020 - 00:20

Hi guys.

I am finally becoming a homeowner in Australia (only after I pay the mortgage LOL). Partner and I bought an apartment off the plan and settlement is happening first week of November. Yay!

According to the contract, we have the right to send our inspector "at any reasonable time in the first week before settlement". According to consumer.vic.gov.au "You are entitled to inspect the property at any reasonable time during the week before settlement." - My interpretation is that this should include all the purchasers, not just one of them.

The developers have named a company to manage the settlement process, which has been smooth. The pre-settlement inspection has been organised for next week.

The only issue is that, because of COVID-19, they are organising only one pre-settlement inspection and limiting to three people, and they say we must choose either the two purchasers or one purchaser and the inspector. The person organising the settlement process will be present.

Again, I understand and hate the COVID-19 restrictions, so I asked them to organise a second inspection so my partner and I would go in the first inspection, and I would join the inspector for the second inspection. They said only one inspection can be organised.

I don't think it's reasonable to expect that one purchaser or our inspector will be left out. If I had to choose three people for the single inspection, I'd rather choose the two purchasers and our inspector, and exclude the settlement company. All this process is obviously important, and we don't want to settle without seeing the finished apartment, or without our inspector's report. I believe having this virus around can't be an excuse to skip important steps in this settlement process. Again, as it's an apartment off the plan, we haven't inspected the property since construction started.

I'm waiting to hear from our solicitor as well, but I wanted to know what ozbargainers think about that. There are settlement rules in Victoria, but with the current restrictions everything becomes blurry and people justify whatever they want.

Any thoughts?

Cheers

Update 13th October:
I told the developers that we would have to delay the settlement until both my partner and I, and the inspector could see the property.

The gentleman responsible for the settlement explained all the reasons for that, clarifying that the limit of two people is an internal decision (developer) to minimise the risk of transmission and not ruled by the government. However, he discussed the situation with the developer and they will accept having the inspector together. He recommended we don't stay all together, which I think is reasonable. I believe they are in good faith.

This settlement is probably the only event I have been looking forward to in this shitty 2020. I've planned that for more than one year and couldn't allow this virus to cause even more disruption.

That's it. Problem solved, inspection will happen as planned.

Thanks everyone for the contributions. 😉

Home & Garden

Comments

  • Balmaino on 12/10/2020 - 13:00
    +10

    That's absolute crap, you have every right to do as you asked. Their rep can wait outside if they're so worried about social distancing.
    They cannot just say "BeCaUsE CoViD" and start waiving rights

    • Seraphin7 on 12/10/2020 - 13:14
      +2

      Yet unfortunately so much as been taken/given away "BeCaUsE CoViD" for close on seven months now.

    • this is us on 12/10/2020 - 14:38
      +2

      Exactly what I think… Everything is "due to COVID-19"… Due to COVID-19, we have no rights anymore…

  • bobbified on 12/10/2020 - 13:01
    +2

    The restrictions are neither yours or anyone is who is a party to this settlement's fault.

    Can you compromise and go in one after the other on the same day? Spend half the allocated time in there each?

    • this is us on 12/10/2020 - 14:41

      That's an option we would consider, but I want to give the inspector all the time he needs to do what he is supposed to do.

      • bobbified on 12/10/2020 - 15:15
        +7

        I mean, keep the inspector in there, but switch between yourself and the other owner - not switch the inspector out.

  • Drakesy on 12/10/2020 - 13:16
    +7

    If anything they should be making sure all your needs are met, buying an apartment off the plan during covid, you're doing them a huge favour.

  • Tee Rex Arms on 12/10/2020 - 13:17
    +1

    Complying with government legislation would outweigh some civil agreement.

    • whooah1979 on 12/10/2020 - 14:06
      +3

      The buyers being able to do a pre-settlement inspection on the property is a right under common law.

    • [Deactivated] on 12/10/2020 - 14:07
      +4

      Currently you're allowed a client, their partner, and any dependents. Separately building inspectors are a permitted industry. So the building inspector doesn't technically count (though ideally they would attend separately). There's no such 'three person restriction' and it would be crazy if there were since basically OP and their partner are no significant increased risk singly than together.

      This would be purely down to the companies internal COVID policies.

    • mskeggs on 12/10/2020 - 15:26

      Nobody is seeking to break the law, just conduct 2 inspections.

  • markathome on 12/10/2020 - 13:33
    +3

    Can't you just both drive there? The inspector does his thing with one of you there? During his work one of you walks down and the second walks up. Then that second person leaves and the first person meets with the inspector to finish things up. Good idea to have the same person meeting with the inspector initially and after so that person has full context.

  • GG57 on 12/10/2020 - 13:36

    Whilst people are correct in visiting the premises one after the other would overcome the social distancing aspect of the regulations, it doesn't necessarily overcome the risks from contamination inside the premises from others.
    I assume the stated inspection protocols are in line with the current government restrictions. If they aren't, then you can argue, but only if they aren't.

    Inspections are not necessary by all parties; it isn't your chance to confirm the view or those aspects. It is to confirm that you are buying a property in a state that was agreed to. I'd actually probably leave it to a professional inspector and let them do it for me, as they are better versed in doing the inspections.

    • [Deactivated] on 12/10/2020 - 13:47

      Knowing people who have had some pretty glaring things missed by inspectors when buying interstate, I'd never trust someone to do it for me, even if I'd still engage a professional as well.

  • [Deactivated] on 12/10/2020 - 13:46
    +10

    You have to settle sight unseen?

    GTFO.

    If they're so worried about covid, they can delay settlement. A settlement is part of an agreement. You cannot agree to the condition of something if you haven't seen it.

    Ludicrous.

    • GG57 on 12/10/2020 - 14:16

      No-one is preventing them from undertaking an inspection.
      There is just a restriction on how many people can attend.

      • [Deactivated] on 12/10/2020 - 14:22
        +3

        That's like allowing someone to defend themselves in court.

        No one is stopping them but you can't bring a professional (ie. a lawyer) to the party.

        Meanwhile, you are up against a seasoned player armed to the teeth with experts and lawyers.

        So yeh, they're not denying OP the opportunity to inspect. They're just limiting it to the point where it is effectively pointless.

        • GG57 on 12/10/2020 - 14:28
          +2

          Maybe I'm misreading OP's post, but it appears that they can choose to have either the two purchasers attend, or have one purchaser and an inspector attend.
          Their best chance of noticing defects is to include their own inspector; by default that leaves an opportunity for one purchaser to also attend. In my view, that should work.

          • [Deactivated] on 12/10/2020 - 14:32

            @GG57: They are saying that there can be one inspection.

            In that one inspection, either OP (+family) may attend or inspector may attend. Not both.

        • this is us on 12/10/2020 - 15:03
          +2

          Just to clarify, the two options they've offered:

          1. Settlement agent, 2 purchasers (no inspector)
            OR
          2. Settlement agent, 1 purchaser (me), 1 inspector

          It's just one inspection, I am going for this inspection and I must choose between my partner, who is a purchaser with me, OR the inspector.

          • [Deactivated] on 12/10/2020 - 15:51

            @this is us: If your partner is on the title, it should be both of you and the inspector.

            If only your name is on the title, then I think it is not as outlandish to restrict the inspection to only you and the inspector.

    • this is us on 12/10/2020 - 14:57

      They justify saying that "one of the purchasers" will be seeing it, but we both want to see it… And we also want to have our inspector there, even if not on the same day.

      I will use this reasoning (can't settle without both purchasers and inspector inspecting the property) if they don't offer any reasonable option.

      • DoctorCalculon on 13/10/2020 - 02:28

        Their justification seems illegal, COVID times or not.
        There are two parties that are signing the sales agreement (and will be on the title). Therefore, they both need to be present.

        Have you reached out to or sought advice from Consumer Affairs Victoria?

  • [Deactivated] on 12/10/2020 - 13:56

    It looks like the rules are published as:

    Private inspections for residential real estate can now resume with one client (dependants and a partner may also attend) and are limited to 15 minutes. Residents who are living in the home must not be there. The 5km rule does not apply when inspecting a house for rent or purchase. You can only leave your home for a maximum of 2 hours to attend the inspection and you cannot travel into regional Victoria.

    https://www.consumer.vic.gov.au/resources-and-tools/advice-i…

    Basically this actually says you cannot have an inspector with you at all. There's no actual limit on the number of people, just that only 'one client + dependants / partner' so an inspector isn't substitutable (which makes sense because for risk purposes everyone who lives in a house is basically going to have COVID or not more or less).

    HOWEVER I'd be shocked if property inspectors weren't allowed to carry on working totally separately to your inspection, thus a second inspection with the inspector should be possible. Especially since there's no restriction on the number of inspections.

    Honestly I'd hold out for restrictions to be eased further before settlement, which they might be by the first week of November anyway. I'd not want to be limited to 15 minutes of inspection on an off the plan apartment in any case.

    Note here:
    https://www.dhhs.vic.gov.au/professional-scientific-technica…

    Since the 5th August building inspection has been a permitted industry. So there's nothing in the COVID restrictions stopping your building inspector from attending separately to you. That's purely your seller being difficult.

    • jjjaar on 12/10/2020 - 14:13

      That’s for viewing places to buy, properties still up for sale. OP has already committed to buy by signing a contract. It wouldn’t be the same rules.

      But as you have said - there is nothing in that information that prevents a third person viewing in another 15 min block. Based on that, OP should be able to view with inspector, then their partner should be able to do the same.

      • [Deactivated] on 12/10/2020 - 14:18

        Settlement is still part of the purchase process (committing to buy is not the same as having bought, it's not 'sold' until settlement, even if there are penalties for pulling out). If it's not these rules then it's not actually allowed at all.

        • jjjaar on 12/10/2020 - 14:33
          +2

          Of course it’s not the same as sold but it’s a lot bloody closer than just inspecting a place. Anyone can inspect. I’m not in the market to buy and I can go look at places if I want.

          Also worth noting that it’s an empty property. The strict rules are usually in place to protect the existing residents and inspectors alike.

          If it's not these rules then it's not actually allowed at all

          Well that’s just plain wrong:

          https://www.dhhs.vic.gov.au/homes-and-property-metropolitan-…

          Can owners attend final inspections and sign contracts?

          Final inspections and signing of contracts should be undertaken remotely where possible.

          If you must attend the site to complete a final inspection prior to settlement, it must be by private appointment. Physical distancing must be maintained and face masks must be worn.

          In this case as OP has never viewed the property, they must attend. There is no limit on number of people noted here.

          • [Deactivated] on 12/10/2020 - 14:35

            @jjjaar: That's Cunningham's Law for you.

        • whooah1979 on 12/10/2020 - 14:36

          The rep can wait outside while the buyer and their inspector can go in.

          • bobbified on 12/10/2020 - 16:30
            +1

            @whooah1979: How's the rep going to try "explain away" all the defects while he's sitting outside? lol

      • [Deactivated] on 12/10/2020 - 14:18
        +7

        Exactly.

        The developers are claiming there is a situation that commands a compromise (COVID) but they're expecting the client to be the sole party inconvenienced.

        The developer gets to settle for the same amount at the same date and the buyer has to make do without thorough inspection.

        In fact, this benefits the developer as there would be fewer defects reported hence reducing their liability.

        So, in all of this COVID stuff, the developer is asking for a compromise - you accept the unit without thorough investigation and the developer gets the benefit of oversight.

        What a load of shit.

  • Kail on 12/10/2020 - 15:13
    +1

    There's no real difference between one person and multiple people in terms of risk if they all live in the same household. You don't have to social distance from the family you live with.

    Definitely get in contact with your solicitor, the developer is being totally unreasonable.

  • avoidfullprice on 12/10/2020 - 16:13

    If all fails, live stream your visit to your partner.

    I didn't have an inspector for my off the plan purchase. Because unless they identified major defects, I have to settle with the developer anyways because if the contract.

    Congrats and good luck

    • this is us on 12/10/2020 - 17:14

      Yes, there is something like that on my contract too. However, there is something else saying that minor defects, although not an excuse for not settling, should be listed pre-settlement, so the developer has four months from settlement to correct the listed issues.

      Even after that, problems might appear and the developer still has responsibilities, but it's better if the problems are identified and documented pre-settlement.

  • chuckles89 on 12/10/2020 - 16:17
    +1

    i went through a similar process having settled in the midst of stage 4 restrictions. The developer was very accommodating. I had asked to extend the time frame from 1.5hrs to 2.5hrs for inspection. The 2 external inspectors came in and spent 1.5hrs completing their inspection, then my sister and I had come in the last hour to do our own inspection. Perhaps ask the developer to extend your time and split it. Best of luck, in times like this they definitely need to be accommodating

  • this is us on 14/10/2020 - 11:48

    Thanks everyone for the contributions. Added update.

    • jjjaar on 15/10/2020 - 22:12

      He recommended we don't stay all together, which I think is reasonable.

      Absolutely reasonable - I’m glad they were able to understand the importance of this part of the process. Hopefully they will allow others to do the same.

      Good luck with the inspection!

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