What you need to know: Pre-settlement Inspections

What is a pre-settlement inspection?

A pre-settlement inspection gives you the opportunity to ensure that the property you are purchasing is in the same condition as it was in when you entered into the agreement. It also allows you to check that any chattels included in your purchase work as they are supposed to and that any work that the vendor promised to complete before settlement has been completed.

When should I complete my pre-settlement inspection?

Generally, pre-settlement inspections should be carried out at least two working days prior to settlement. This is to give enough time for any issues from this inspection to be raised with the vendor, and rectified. It also means that the vendor may have begun to move their belongings out of the property, so allows for a closer inspection of the property.

Does everyone get to do a pre-settlement inspection?

If the property you are purchasing is tenanted, you may not have a right to a pre-settlement inspection. If you are buying a tenanted property and wish to complete a pre-settlement inspection, you can contact us to help you negotiate a right to a pre-settlement inspection prior to entering an agreement to purchase a property.

How many pre-settlement inspections can I do?

Generally, you can only complete one inspection. However, if you ask that the vendor rectify an issue following your first pre-settlement inspection, and they agree to do this, then you can inspect the property once more to ensure that this work has been completed.

What should I look out for in my pre-settlement inspection?

There are plenty of checklists online, which we suggest you save to your phone or print out and take to the pre-settlement inspection with you.

Some of the things you should look out for are:

• Whether the chattels listed in the sale and purchase agreement are in reasonable working order (e.g. fridge, washing machine, dishwasher – you should ask to run these to check that they are working).
• Damage to walls which was not previously present (holes in the wall).
• Damage to carpets, flooring, curtains.
• Look at ceilings and around toilets, washing machines, dishwashers for any signs of leaks.
• Do the toilets flush?
• Are all the electrical sockets working?
• Are all the lights working?
• Have there been any broken windows?
• Do the sinks (kitchen, bathroom, laundry) drain properly?
• Do the oven and the oven lights work?
• Does the extractor fan work?

There are no issues, but the house is not in a clean and tidy state, what do I do?

Some purchasers will be surprised to find out that there is no requirement for the vendor to clean the house prior to settlement.

If you would like the vendor to get the house professionally cleaned before settlement, this is something that you should discuss with us before entering into an agreement.

Similarly, if you are concerned about the vendor leaving rubbish at the property, you should speak to us before entering into an agreement. We can negotiate a clause into the agreement which ensures that the rubbish is removed prior to settlement (if the vendor is agreeable of course!).

I’ve completed my pre-settlement inspection, and I have an issue, what should I do?

You should contact your lawyer immediately. They will be able to work with you to use the rights available in the sale and purchase agreement to rectify the issue or issues.

What remedies do I have available to me?

Generally, if there is an issue raised from the pre-settlement inspection, this does not give you a right to cancel the agreement. However, it can give you a ‘right to compensation.’

The following remedies may be available to you:

1. Asking the vendor to remedy the issue before settlement at their cost; or
2. Asking to reduce the purchase price to enable you to remedy the issues after settlement yourself; or
3. An agreed amount is retained on settlement until the issues have been resolved.

What if I find an issue after settlement has been completed?

It is much harder to get a vendor to engage once they have money in hand. However, if you do notice an issue post-settlement, you can get in touch with us to discuss your potential options.

If you have any questions about pre-settlement inspections, please feel free to get in touch with our friendly property team.