The outcome of final inspections can have a significant impact on the transaction

How to avoid post-settlement disputes

To minimise the likelihood of disputes after settlement, keep both settlement agents informed of the outcome of final inspections.

If a settlement agent doesn’t know about issues arising from final inspections, they can’t address them. During a past settlement case, we were not informed about a dispute between the buyer and seller of a property – which resulted in problems after settlement.

At the final inspection, it had become apparent that the electric gate barring the driveway was not working, which prevented cars from passing into the property. The real estate agent had assured the buyer that the seller would repair the gate.

In spite of this verbal agreement, the buyer arrived at her new property after settlement to discover that the gate was still broken. She contacted us to make us aware of the issue for the first time, but too late: the seller now refused to fix the broken gate, claiming that it had been working when he last used it.

The buyer then had the option of taking legal action against the seller to claim her right to working electrical fixtures, plumbing and gas fixtures, as was warranted by the seller on the contract.

But in the interests of keeping his word and avoiding a further dispute with the buyer, the real estate agent chose to pay for repairs himself.

If either the agent or the buyer had let us know about the broken gate prior to settlement, we would have made every effort to ensure the situation was addressed before settlement occurred – either by having the gate fixed, or by making arrangements to have a compensation amount credited to the buyer.

Help us create a smooth settlement experience for your clients by keeping us in the loop when it comes to final inspections.

Image by Vagawi via Flickr.