So you’ve inspected the property but there are a couple of little things that need some attention before you sign on the dotted line. Some properties just need a little bit of love and repair before settlement.
There are of course two ways you can factor repairs into your final offer for a property. You can 1) deduct the amount that you feel they are worth from the final price and fix them yourself or 2) require the vendor to fix them before settlement.
TIP: Let’s take some broken tiles in the bathroom as an example. If you are deducting an amount from your final offer to the vendor to fix them then make sure you make this clear to the real estate agent. Clear communication to the vendor will make sure that they know why your offer has changed or is slightly lower than expected.
“BUT WHAT IF THEY DON’T”
One thing that we touch on below and people don’t realise is that because conveyancing and property law to a larger extent is transactional in nature, once settlement has occurred everyone moves on very quickly.
This is why the advice of a good lawyer before you sign the Contract of Sale is so important. By structuring the Special Condition for repair correctly the Purchaser remains in control of the repairs.
Whilst it’s a blunt question, ‘but what if they don’t do it’ is actually quite easily answered. By ensuring that you reflect the cost of the repairs in the Special Condition, the Vendor can choose to not complete them at a later date, subject to them deducting that amount from the overall sales price.
HOW DO YOU ENSURE QUALITY?
You ensure quality at settlement by being specific. One of the biggest mistakes that people make trying to draft their own Special Conditions is not creating a proper legal framework for what it is meant to do.
EXAMPLE: “The Vendor will install air conditioners in the upstair bedrooms before settlement”
To avoid cooking in summer, the Purchaser would like some air conditioners installed upstairs before settlement. The Vendor keen to sell the property agrees to get them put in. Sounds good?
Sounds terrible. Who is installing the air conditioners? Which air conditioners are they installing? Are the air conditioners going to be new? Who is installing them? Does the Purchaser get to choose where they are located in the bedroom?
As you can see there plenty of questions that can arise from a poorly worded Special Condition. I know if it was me moving into that house I would want brand new air conditioners, installed where I want them by a trained professional. Not second hand air conditioners installed by a mate of the Vendors who loves renovation shows wherever they feel like it.
INSPECTION
Like a grand opera, the settlement process crescendos in the final days. Often only little bits of work happen behind the scenes to set everything up before BOOM everything comes together. The problem with only knowing if the works have been completed at settlement is that you are reducing your bargaining power significantly because you have already paid your money.
In most property transactions, the Vendor and Purchaser won’t have each others personal details which means the only way to contact them will be through their lawyer. The lawyer has already been paid at settlement and is now moving onto the next file…and you can guarantee the Vendor is not paying them extra legal fees to deal with this matter!
To ensure that your works are completed in plenty of time, schedule the final date for completion of the works a week or two before settlement. This will allow you to inspect them with the real estate agent to make sure they reflect the intentions of the parties in the Special Condition.
If you’re thinking about Special Conditions then you might also enjoy knowing exactly what you get when you purchase your property.
