Settlement

Section 4 of the Joint Form of General Conditions provides contractual conditions for the event of a delay in settlement through setting out the rights and obligations of the buyer and seller depending on whether it is a buyer or seller delay.

The answer depends upon whether the seller knew the structure did not have local government approval.

If the seller did not know then the contract would proceed to settlement without any further obligation upon the seller.

If the seller did know but did not disclose that fact to the agent to in turn relay to prospective buyers then the contract would proceed to settlement. In this instance the buyer could take action against the seller to recoup any damages they incurred as a result of the seller not disclosing relevant information.

The purpose of the final inspection is to ensure that the property is in the same state and condition that it was in immediately prior to signing the contract.

The seller in the Joint Form of General Conditions at section 9.1(e) has made a representation to the buyer that the property at settlement will be in the same condition as it was in immediately before the Contract Date.

The purpose of the final inspection is not to find minor faults with the property and then expect the seller to fix those items.

The buyer, prior to submitting an offer, should have made themselves familiar with the state and condition of the property and noted any discloses by the seller through their real estate agent about the state and property.

The buyer would also be looking to ensure that the seller has complied with any special conditions on the contract. For example the seller may have agreed to repair a cracked wall.

There is no right or wrong procedure.

It is important to remember that it is always a seller’s right to assume that any offer received from a buyer is their best offer.

If the seller has several offers to consider then the seller may ask the agent to inform the buyers that there are multiple offers and that the buyers have until a specified time to present their best offer.

The seller could also decide to only negotiate with one of the offers.

On the assumption that you have used the REIWA standard contract, the contract continues until either the seller terminates the contract or the buyer satisfies the finance condition and notifies the seller.

This is addressed in section 6.5 of the Joint Form of General Conditions for the Sale of Land.

Essentially the buyer is entitled to the keys at settlement or on possession.

If immediately prior to settlement the seller occupies the property as the seller’s principal place of residence then the seller may remain in occupation until 12pm on the day following settlement. If that is the case then the buyer will not be entitled to the keys until 12pm on the day following settlement.