Was just wondering how many buyers do a final comprehensive inspection on settlement day prior to signing, to confirm the property has not been damaged or chattels are missing. In my pestering of people at barbies over the hols, I was surprised that most don’t consider it, as they assume the contract covers them against losses. I’d hate to try and get compensation back for damages myself though.
Further, in the Qld REIQ “house and land” contract, Clause 8.1 specifically states from 5pm of the day after the date of signing the contract, “the property is at the buyer’s risk”. REAs have told me that both parties need to independently insure the property, as the issue is contentious. Has anyone here had issues during the contract period where an insurance claim has been made?
Bruce
Mooloolaba, QldHi Bruce,
I’ve only ever bought three props, but everytime I have done a before settlement inspection.
This is just a personal inspection though, not a professional one.
I have always been advised to take out building insurance from the day an offer is officially accepted. As most people I have spoken to have all considered this a grey area, and I like to reduce risk where possible.
Sue [
]“Be careful not to step on the flowers when you’re reaching for the stars”
Hi
I always inspect the night before settlement. I too take out building insurance once the offer has been accepted.
In future, I may even have a clause in the contract that the dishwasher, oven and hotplates work. On my PPOR, none of these worked and only 2 of the 4 hotplates worked.
I even had a building inspection done prior to my offer. We were a little pissed when these did not work. We heard the dishwasher making noise and assumed it was working. In fact thats all it did was make a noise. So we had to advance our kitchen renovation.
If there is a tenant in there, I ususally assume things are generally ok, as they would not continue to rent unless things were ok. I also keep the same rental agency, so they can sort problems out for me after settlement. I also ask the agent, if there are any problems with the house.
Anyway, just my thoughts.
I have done a couple of settlement day inspections – definitely needed to do one where the guy was a shonk. Included furniture, but tried to say that two single beds were joined together and just ‘looked’ like a double bed.
I just said ‘too bad, you should have read your contract – now get me a double bed, or we take this through the solicitors’. Surprise, surprise, the double bed that was there on offering for the property was returned!!
Others I haven’t done though. lately my purchases have been off the plan, and so we have a settlement a week or so prior, and note things for the builder to fix, and then we get a further 90 days to chase them up.
Cheers
MelI have been through all of this.
One property had the guts of a built in BBQ taken even though contract said it was to stay. My solicitor advised me against any legal action as it was well used and only worth a few hundred dollars new.
Another property had a failed HWS in it (working at building inspection time). Although I eventually did get the owner to repair it I was advised that under fair wear and tear provisions she didn’t need to. We actually encouraged the tenants to take it to the Dept of Fair Trading – (tenancy section) as it is illegal not to fix HW, security or safety issues if the property is rented, and it was fixed.
Anyway whilst she fixed it she hasn’t paid the bill and now I get hassled by the tradesman for payment.
I think the insurance requirements vary from state to state. Here in NSW we need a certificate of cover for the bank prior to settlement but that certificate need only be effective from settlement. I believe it is different in QLD.
Cheers,
Simon Macks
Mortgage Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
I normally inspect the property again prior settlement if the property within my reach ie. I can get their. Otherwise if the property is tenant and out of reach, during my first inspection I normally ask the tenant what need to be fix? do you have any other problem with the property?. If the tenant pin point the problems then you can ask the vendor to fix it or try to negotiate a new offer.
Warm Regards
ChanDollars
[Keep going, you’re nearly reach the end of financial freedom]Pre-settlement is very important , there may be something missed if you don’t inspect again before settlement, Somtimes, I also make a buiding inspection by myself.
[:X]
JulianHi,
We have a clause in the contract that reads,
“The vendors warrant that all fixed household appliances, electruc light fittings, heaters, air conditioners, and other associated items are in good working order. They further agree not to remove or substitute any of the same, including curtains and drapes, between the time of purchase and settlement and agree to demonstrate such items to the purchasers at or about the date of settlement.”
As power may not be connected when we inspect the property pre purchase, we can’t be sure electrical items are working. At least we have a come back if upon getting the power connected, some items aren’t working.
Gordon
Invest in People for a Prosperous Future!
I generally take out insurance from the time the contract becomes unconditional.( building and pest inspections completed) I figure if something goes wrong before then then the inspection will find it and negotiations entered into. A cover note is usually enough as you dont have to pay for it for a couple of weeks if the contract flops for any reason then just call the insurance and remove cover without cost. Just a lot of correspondence! I always inspect before settlement, not that there is much that can be done without causing major upset. I guess because I do my legals myself I follow the contract and all the protection It can offer. Another Thing I have found is that if they percieve you are going to inspect they are less likely to try anything naughty![
]Hi Bruce,
It’s very important to get a final inspection done before settlement if at all possible. I was taken for a ride by a couple of elderly gentlement (no, men) who assured me that the property would be left spotless and not to do a final inspection as they were packing up to leave and the place would be a mess.
It cost me many hours (as the property was not close by) and a few trips to the tip to get rid of all the rubbish that was left behind.
Sad to say I won’t be trusting people’s word for future purchases.[
]Linda
Hi
This is interesting. I wonder where you find out such insurance cases – and outcomes.??
The ” grey ” area it certainly is.
Ive heard several on submitting offer, offer acceptance, exchange of contracts, when contracts become unconditional and insurance that is effective from settlement day. Lenders will require some certificate of currency in any case. The idea of limiting the risk is commonsense. What if the Vendor/ Purchasers sum insured is differing ??? The mind boggles!!Its a good idea to get photographic records of a property “as inspected”.
Curtains dissapear – change, BBQ Equip is common and dishwashers do dissapear as does the nice pile of pavers you had intention of using. Never assume anything…make sure the contract is endorsed with inclusions.Regards
“Do not follow where the path may lead. Go instead where there is no path and leave a trail” Ralph Waldo Emerson
Originally posted by Becky&Gordon:Hi,
We have a clause in the contract that reads,
“The vendors warrant that all fixed household appliances, electruc light fittings, heaters, air conditioners, and other associated items are in good working order. They further agree not to remove or substitute any of the same, including curtains and drapes, between the time of purchase and settlement and agree to demonstrate such items to the purchasers at or about the date of settlement.”
As power may not be connected when we inspect the property pre purchase, we can’t be sure electrical items are working. At least we have a come back if upon getting the power connected, some items aren’t working.
Gordon
Invest in People for a Prosperous Future!
Hi, what happends if your buying at auction, can this clause still be added?
Are dishwashers normally included as a fixture/fitting?
What about washing machines/dryers?
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