Pre-Settlement Inspections – key things to remember

Under the standard Agreement for Sale and Purchase if a property is being sold with vacant possession, a Purchaser has a right to carry out a pre-settlement inspection before the settlement date.

If the Purchaser has any issues that arise from the pre-settlement inspection, under the Agreement for Sale and Purchase they are required to issue written notice to the Vendor before 5pm on the last working day prior to settlement.  For example, if the settlement date is a Monday, then the last working day before settlement would be the previous Friday.

Accordingly, it would be prudent for agents to arrange for the pre-settlement inspection to be completed at least two working days before the settlement date to ensure that a Purchaser’s position is protected and that there are no unnecessary delays on the settlement date.

If the Purchaser does raise any issues at the time of inspection, we recommend that these issues be disclosed in writing to the Vendor's legal representative as soon as practicable after the inspection.  This will allow all parties time to discuss resolution of any issues.

It is worth noting that any issues raised by the Purchaser would not give them the right to cancel the Agreement or delay settlement.  It would however give them the right to claim compensation.