The Contract for Sale provides for the purchaser to carry out a final inspection of the property before settlement. It is crucial that you carry out this inspection as close to settlement as possible and preferably on the day of settlement.
Why? Imagine this scenario
The very excited purchasers organised with the agent to carry out a final inspection of the vacant dwelling, situated quite some distance from where they reside, on the Saturday before settlement. Apart from an overgrown garden and a less than perfectly clean oven they found the property to be in the same condition as it was when they entered into the Contract. The purchasers were happy to proceed to settlement at noon on the Monday. However, on the Sunday night the dwelling burnt to the ground.
Both the purchasers and the agent were totally unaware of the fire until after settlement had occurred. You can imagine the horror for the purchasers when they arrived at the property with their removal van.
The sting in the tail of this story is that the insurance risk of the home passed from the vendor to the purchasers at settlement. Had the purchasers inspected the property on the morning of settlement they would have discovered the charred remains, refused to settle and the vendor would have had the home rebuilt using his insurance. Instead settlement occurred and the purchasers’ insurance cover did not take effect until settlement, after the fire took place. The purchasers now owned a burnt- out home, have no money to rebuild and owe a large amount of money to their bank!
Whilst it may not always be possible to inspect the property on the day of settlement carry out your inspection as close to settlement as possible and on the morning of settlement do a drive- pass to double check that all is in order.
Rest easy with your conveyance! With over 30 years conveyancing experience and having acted in over 25,000 conveyancing transactions Geoffrey Morgan-Smith Legal and Conveyancing offers you peace of mind on your sale or purchase.