I would always recommend obtaining a pest and building inspection report for an existing property, or a strata report if you are purchasing a unit, villa or townhouse.
These reports ensure that you know exactly what you are buying into and are aware of any upcoming expenses.
It is important to note that you are purchasing the property in its current condition (unless you are purchasing off the plan). On the morning of settlement, you will need to do a final inspection of the property to ensure that it is in the same state (subject to fair wear and tear) that it was in at the time Contracts were exchanged. I believe it is important to do the final inspection on the day of settlement.
I had a client who was purchasing in the Southern Highlands and undertook their final inspection the night prior to settlement. The purchaser was happy with the condition of the property and instructed me to proceed to settlement.
Due to an overnight storm, the purchaser decided to drive past the property on the morning of settlement. A large tree had come down and fallen through the roof and balcony of the property causing large scale damage. If we had proceeded to settlement, the damage would have become the purchaser's responsibility.
Luckily the purchaser had discovered the damage prior to settlement and we could delay settlement, without penalty, until the vendor returned the property to the condition it was in at the time of exchange of Contracts.
The Contract does not provide any enforcement on the vendor as to the cleanliness of the property, as everyone has a different level of cleanliness. This quite often creates problems on settlement, if a vendor has not cleaned the property or mowed the lawn. In saying this, the majority of vendors will work hard to hand over the property in good condition. If there is a swimming pool on the property, I would always request that a special condition be added to the contract that the pool is clean and in working order on settlement.
Unconditional loan approval must be received in writing prior to exchanging contracts with no cooling off period.
If completion is delayed by the purchaser for any reason, including their finance not being ready, the purchaser is liable to pay the vendor penalty interest and legal costs caused by the delay.
The vendor can issue a Notice to Complete which will allow the purchaser 14 days to complete, if the purchaser does not complete the purchaser during this time they will forfeit 10% of the purchase price.
Unfortunately, the vendor is not required to pay penalty interest if they delay settlement. The majority of vendors have no reason to delay settlement and would prefer settlement as soon as possible.
If there is a tenant in the property and the purchaser requires vacant possession, this can sometimes delay the settlement, even if the tenant has been provided with the relevant Notice to Vacate. If the tenant has not found another rental property to move into, they may remain in the property against the vendor's will.
It is important that all agreements between the vendor and purchaser are noted in the Contract or they are not enforceable. All inclusions should be marked on the front page of the Contract to ensure that items such as dishwasher, TV antenna etc are left with the property when the vendor vacates.
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