Once the all-important Offer and Acceptance is signed, it’s vital for Sellers to be made aware of their corresponding rights and responsibilities during the settlement process. This is particularly true when it comes to Buyers’ Inspections, as one couple selling their home discovered when a dispute arose over the buyers’ insistence on conducting a second inspection prior to settlement.

In this archive case, the sellers Mr and Mrs Cameron (not their real names) agreed to a request from the buyers to conduct their final inspection over a week before the scheduled settlement date.

The inspection was carried out as planned and without incident, leaving our sellers to assume that all was in order. However, a few days later the buyers requested an additional inspection so that they could “have a better look at the property”.

Being so close to settlement and with sellers in the middle of packing and moving house, they were understandably reluctant to allow another inspection, and refused the request.

Unfortunately, the buyers insisted on the second inspection, stating that they were legally entitled to a final inspection within 5 Business Days before settlement, citing clause 5.1 of the Joint Form of General Conditions – Right to Inspect to support their claim. “(1) the Buyer is entitled to inspect the Property; and (2) the Seller must grant access to the Property to enable the Buyer to inspect the Property, on 1 occasion within 5 Business Days before the Settlement Date or the Possession Date.”

The buyers argued that even though they had conducted an inspection already, it was not done within 5 business days of settlement.

With the sellers’ continued reluctance to allow the inspection and the buyers’ insistence upon having one, the agent was left in a difficult position and a dispute on his hands. This is a good reminder to ensure the clauses in the Joint Form of General Conditions are well understood and followed.

In addition to sellers being made aware of their rights in regards to inspections, we recommend that sellers are pre prepared and ready for the inspection process by providing them with the following key information:

1. Most buyers will request Building and Timber Pest Inspections, so it is vital to allow enough time to be able to rectify and correct any issues, and to arrange a subsequent re-inspect prior to settlement.

2. To satisfy the Good Working Order clause, any repairs required on the property should be carried out prior to the final inspection to ensure that only 1 time access is needed and that there will be no last minute delays to settlement.

3. In the case where a property is tenanted, appropriate notice needs to be given to tenants in order to gain access as per the Residential Tenancies Act. This needs to be co-ordinated with the managing agent.

Essentially, to ensure a smooth and trouble free inspection process, the key here is for sellers to be prepared.

Image by Bernado Baluganti via Flickr.

About the Author

Residential Settlements

We provide real estate settlement services throughout Western Australia. In addition, we complete Related Party Transfers, Family Transfers, Private Sales and other title related services.