In most contracts the purchaser of property has the right to do a final inspection in the week before settlement.
The purpose of the final inspection is to ensure that the property and goods sold with the property are in the same condition as they were at the day of sale (fair wear and tear excepted).
What should you look for at the final inspection?
- Check that the goods mentioned in the contract are still on the property
- Check that nothing has been damaged (other than through fair wear and tear)
- Check that appliances are working – switch on the dishwasher, oven and stove
- Check that there is not a substantial amount of rubbish on the property
What if you find the property has been damaged or that goods sold with the property are missing or no longer working?
If any of the goods are not working properly then the standard contract has provision to withhold an amount of up to $5,000 from the vendor and pay this to a third party pending resolution of the dispute. The purchaser will also need to pay the same amount to the third party.
If there is substantial damage then a purchaser may be able to require the vendor to fix the damage prior to settlement. It is important to obtain legal advice before doing so to ensure the Vendor is in breach of the contract. If the Vendor is not in breach of the contract and a purchaser fails to settle due to the damage then the vendor could end the contract or claim penalty interest. Often minor damage does not entitle a Purchaser to delay settlement and in this case the Purchaser will need to claim compensation following settlement.