Getting what you paid for on settlement day


​Q: When some friends bought a house last year they had all sorts of problems when it came to settlement, including discovering that the seller had taken the curtains and heat pump that were supposed to be included in the sale. How do we stop this happening to us?

A: On TV, buying a house happens in a kind of fairy tale paradise where the happy purchasers receive a set of shiny golden keys and bound through the doors of their freshly painted, sparkling clean and sun-filled home without a care in the world. As anyone who has struggled on settlement day can tell you, the reality can be rather different.

The trick to a stress-free settlement is to do as much as you can in advance, starting with when you’re​ signing the sale and purchase agreement. This is the legally-binding contract agreed between you and the seller that details the property, the conditions of sale and the price.

Make sure that there is an agreed list of chattels, with notes as to their condition, in the sale and purchase agreement. If the property is full of rubbish, and you want it gone before you take possession, make that a condition of the sale. If there are holes in the fence that the seller has promised to fix, get that in writing on the agreement: don’t rely on verbal assurances that something will be done prior to settlement. It’s far better to get all these niggly details sorted out before you sign the agreement than face protracted battles down the track.

As a buyer, you are entitled to one opportunity to inspect the property before settlement day. This inspection is to make sure that it is in the same or better order it was when you viewed it and agreed to the sale. It is not designed to give you the chance to uncover new defects, or to give a rental agent the chance to appraise the place’s value. A seller does not have to accommodate any extra requests to visit the property prior to settlement. Remember that the seller may have a lot on their plate; making the property available so your interior decorator can measure up for new curtains is unlikely to be a high priority.

Your real estate agent will usually arrange the inspection with the seller, and accompany you to the property. Most experts recommend that this inspection takes place around 24 hours before settlement day so there are no hold-ups to the transfer of funds and ownership. 

When you come to inspect the property, everything should be as it was when you decided to purchase it (as reflected by the sale and purchase agreement). You can expect chattels to be in a reasonable working order unless it has been agreed and documented otherwise. You cannot complain to the seller that the oven isn’t clean enough, but you can raise a complaint if it is missing, or it is a different model to the one cited in the agreement. Don’t forget to check that garage door openers and pool covers are in situ, or that locks work properly.

If there is a problem, you should speak to the real estate agent and your lawyer in the first instance. They can help you negotiate with the seller to remedy any issues,  such as a newly broken window or missing keys.  Your lawyer should work with the seller’s lawyer to reach a satisfactory solution, such as getting the seller to make any necessary repairs, or to deduct any costs from the eventual settlement.

Making the final inspection 24 hours before settlement is due gives you and the seller time to reach an agreement over anything outstanding. This is important, because if you do not complete settlement on the due date and the seller can demonstrate that they were able and willing to complete their side of the settlement, then you will be liable for interest on any portion of the purchase price that is unpaid.  The seller does not need to give you access to the property while any amount remains outstanding.

Like any property transaction, success often depends on doing things right at the start. Get the details right at the beginning and you’ve got a greater chance of a happy ending.