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Final Inspections Before Settlement

The standard Queensland Contracts give a buyer the right to carry out a final inspection prior to settlement.  Buyers and Sellers are often confused about the parties rights and obligations following this inspection.

So what is the inspection for?

The purpose is to ensure that the seller has complied with a number of obligations under the contract.  For example the obligation to take reasonable care of the property between the Contract Date and the Settlement Date and the obligation not to remove any fixtures.

What are fixtures? 

Generally a fixture includes anything on the land or the dwelling that is permanently fixed such that if you remove it, you leave evidence that it has been there.  Examples of fixtures include items like plants in the ground, anything nailed to the wall of the dwelling, dishwashers connected to the plumbing, light fittings, carpets , curtains, shelving.  This is not a finite list though, and you need to consider the circumstances of each case to assess whether the item is a fixture.  Generally items like furniture, washing machines, and fridges are considered chattels, not fixtures.

What if you are a seller and you want to keep a fixture e.g. a plant in the garden?

There is a section of the contract where you can identify “ excluded fixtures”.  You would need to identify the item in this section.  Likewise if you were a buyer and you wanted the seller to leave some items with the property which they would normally be entitled to take e.g. chattels such as furniture items or perhaps a fridge or pool table, there is a section in the contract ( called “ included chattels” ) where you could also list these items.

What does it mean when we say “the seller has to take reasonable care of the property”?

Essentially you need to apply a legal test known as “ the reasonable person test” and consider whether a reasonable person would have treated the property in the same way as the seller in the circumstances.  If for example a seller took to the gyprock walls with a sledge hammer on the day of settlement, that behaviour would be considered unreasonable (surprise surprise!).  If they allowed their children to play cricket in the living room and as a consequence a number of windows were smashed, that would be considered unreasonable.  If however a neighbours child hit a cricket ball from across the road and broke the sellers window then unfortunately that is just bad luck for the buyer.  The seller has no obligation to fix this.  Likewise if the dishwasher stopped working or the hot water system broke on the day of settlement, unless the buyer can prove the seller misused these items then the seller has no obligation to repair or replace.

 

In Queensland, in most standard contracts, when a buyer signs a contract they agree that the property will be at their risk.  This clause extends to these unfortunate things that may happen through no fault of the seller.

CONTACT GM LAWYERS FOR MORE DETAILED INFORMATION HERE