Checklist for a property buyer’s final inspection

31-July-2013 Family Law Property By Mark Streeter

If you have ever purchased a property, you would have faced that nervous day three days prior to settlement, where you were invited to inspect the property. But what is it that you looked for when you did your inspection? And did you have any regrets days or weeks later, realising that you could have resolved a problem you are facing with the property if you’d been more thorough in that final inspection?

Under the provisions of the standard contract for the sale of property, the purchaser is entitled to make one inspection of the property in the three days before the time appointed for completion. The vendor has an obligation to leave the property in the same condition it was in at the time contracts were exchanged, subject to fair wear and tear.

The purpose of the final inspection is:

  1. To ensure that all of the inclusions listed in the contract remain.
  2. To verify that the exclusions listed in the contract have been removed.
  3. To check that appliances, equipment, fittings and services are in working order.
  4. To ensure there has been no significant damage to the property since the exchange of contracts.
  5. To verify that the property is vacant.
  6. To ensure that no rubbish, building materials, refuse etc. is left in the house or on the property.

It is preferable for the final inspection to take place:

  • after the vendor has moved out;
  • as close to the settlement time as is practicable, but
  • allowing sufficient time to resolve any problems.

The vendor does not have a legal obligation to leave the property in a spotless condition but it must be in a condition that is similar to the time when the contracts were exchanged.

The effectiveness of a final inspection will largely depend upon the thoroughness of the purchaser’s due diligence investigation prior to contracts being exchanged.

Evidence may be required as to the condition of the property at the time of exchange. Such evidence can be obtained from inspection reports, photographs taken, statements made by or on behalf of the vendor stating that appliances and equipment are in full working order.

Any problems discovered at the final inspection should be brought to the attention of the vendor as soon as possible. Most issues can be resolved by the parties negotiating and acting reasonably, failing which the purchaser’s options include:

  • Delaying settlement until the problem has been rectified
  • Making a claim for a reduction in the purchase price
  • Agreeing to settle the matter with money being retained to rectify the problem within a specified time, or
  • In extreme cases, rescinding or terminating the contract

Clearly, it is far preferable to make an arrangement to rectify the issue prior to settlement when the vendor may be more amenable to doing so because of pressure to finalise the matter. It is invariably more difficult and costly to make a claim once settlement has taken place.

For more information or to discuss your property or family law issue, please contact one of Streeterlaw’s experts on 8197 0105 or send an email to advice@streeterlaw.com.au

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Written by Mark Streeter

Mark Streeter

The Director of Streeterlaw, Mark has been practicing Law since 1994. He has attained his Masters of Law in 1999 and in 2006 was awarded his Specialist Accreditation in Commercial Litigation. Mark is a member of ARITA, a graduate of the AICD and a member of AICM. A member of STEP, Mark enjoys working in the area of Wills and Estates. In 2020 Mark is the Chair of STEP NSW.

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