Final inspection property buying: Approaching settlement day, one critical event that often raises concern among buyers is the final inspection. Scheduled just before settlement, this walk-through allows the buyer to assess the property before the official transfer of ownership. In Western Australia, every buyer has the right to a final walkthrough, but is it really that straightforward?
What exactly is a final inspection?
As the name suggests, a final inspection is the last opportunity to inspect the property before the exchange of money and ownership. Its primary purpose is twofold: to ensure the property remains in the same condition as when purchased and to verify that any agreed-upon work has been satisfactorily completed.
Time constraints often press buyers as the settlement day approaches, making them tempted to skip the final walk-through. However, forgoing the inspection is never advisable, as addressing issues after settlement becomes exceedingly challenging.
It is important to understand that final inspections are distinct from home inspections. This is not the time to reopen negotiations with the seller for repairs. Any concerns should have been specified during the offer and acceptance stage, and the seller is not obliged to attend to pre-existing maintenance items.
When and how to conduct the final inspection
The final inspection typically takes place within five days leading up to settlement, during business hours (9 am to 4 pm). While these guidelines exist, practicality may require negotiating a different time, with the mutual agreement of both buyer and seller. Conducting the inspection a few days in advance allows sufficient time to address any issues and avoid potential settlement delays.
Limiting the number of attendees
While you might be tempted to bring along multiple people to thoroughly inspect the property, the Joint Form of General Conditions in WA specifies that a buyer may be accompanied by only two persons during the inspection. This limitation aims to avoid confusion and streamline the process.
Buying a tenanted property and final inspection
In Western Australia, the Residential Tenancies Act 1987 governs the rules and regulations regarding tenancy agreements and landlord-tenant relationships. The Act specifies the amount of notice a landlord or property manager must provide to enter a tenanted property.
For routine inspections and other non-urgent reasons to enter the property, the landlord or property manager must give the tenant a minimum of seven days’ written notice. This notice should state the purpose of the entry, the date and time of the intended entry, and comply with the other provisions of the Act.
It’s important to note that entry can only occur at reasonable hours, which are generally considered to be between 8:00 am and 6:00 pm on any day other than a Sunday or public holiday.
However, there are specific situations where shorter notice periods are allowed. For instance:
- Urgent Repairs: If there is an urgent need for repairs or maintenance, the landlord may enter the property without giving notice or with a minimum of 24 hours’ notice.
- Emergency: In case of an emergency that poses an immediate risk to the property or the safety of its occupants, the landlord can enter the property without notice.
- Abandonment: If the landlord reasonably believes that the property has been abandoned by the tenant, they can enter the property to inspect it, carry out maintenance, or show it to prospective tenants or buyers. In this situation, a minimum of 24 hours’ notice is required.
It is essential for landlords and property managers to adhere to the notice requirements to respect the tenant’s privacy and rights. Similarly, tenants should be aware of their rights and cooperate with the landlord’s entry during the specified notice period.
What to check during the final inspection
The specific items to check during the final inspection depend on the contract’s terms and conditions. If the seller agreed to specific maintenance tasks, verify their completion during the inspection. Additionally, if the contract stipulates that plumbing, gas, and electrical systems must be in working order, you have the right to examine and request fixes before settlement.
Among the general items to check (based on the contract conditions) are:
Electrical & Gas
- Test all light switches
- Check power points
- Verify functionality of inbuilt appliances (oven, hot plates, air conditioner, dishwasher, heaters, exhaust fans)
Plumbing
- Ensure the hot water system works
- Test internal taps for sufficient pressure
- Check toilets and run showers
- Ensure sinks and troughs drain properly
Other
- Verify the operation of bore pump, pool equipment, and reticulation system
- Request copies of instruction manuals for appliances
The importance of thorough inspection and contract clarity
The final inspection emphasizes the need for comprehensive property assessment before finalizing the contract. Any concerns or issues should be explicitly written into the contract to avoid complications later on. Once the contract is signed, it’s essential to focus on verifying that the property remains as agreed upon, and the final inspection is not an opportunity to reopen negotiations.
Utilize the expertise of your settlement agent and real estate agent to ensure a smooth final inspection process. Many agents provide pre-prepared checklists to guide you through the inspection and help ensure a successful outcome. Remember, transparency and prompt attention to any necessary fixes will lead to a satisfying transaction for both parties involved.
What if I bought a property as is?
When the contract explicitly stipulates that the property is sold “as is,” it means that the buyer accepts the property in its current condition, without any warranties or guarantees from the seller regarding its state. In such cases, the property is exempt from any repairs or alterations discovered during the final inspection.
When a property is sold “as is,” the buyer acknowledges that they are assuming full responsibility for any existing defects or issues. This clause is typically included to protect the seller from any future claims or demands for repairs after the sale is complete. It also puts the onus on the buyer to thoroughly inspect the property before entering into the contract, as they will not have the opportunity to negotiate repairs or ask the seller to rectify any problems found during the final inspection.
The “as is” provision is legally binding, and both parties must fully understand and agree to its implications before signing the contract. For buyers, it’s essential to exercise due diligence during the initial property inspection and consider obtaining professional inspections, such as home inspections or structural assessments, before making an offer.
By accepting the property in its current condition, the buyer accepts the risks associated with any hidden or apparent defects. The final inspection becomes a critical moment for the buyer to validate that the property is as they expect it to be, based on their previous assessments.
While “as is” contracts place the burden of repairs on the buyer, they do not absolve the seller from disclosing known defects or issues. Sellers are still obligated to provide accurate and transparent information about the property’s condition to potential buyers.
For buyers considering properties sold “as is,” there are several important considerations:
- Thorough Inspection: Conduct a comprehensive inspection before making an offer and consider hiring professionals to assess the property’s condition.
- Budget for Repairs: Since the seller won’t be responsible for repairs, buyers should budget for potential post-purchase expenses to address any issues.
- Negotiation Limitations: Understand that the “as is” clause means repairs cannot be negotiated after the contract is signed.
- Request Disclosures: Despite the “as is” clause, buyers can still ask the seller to disclose any known issues to make an informed decision.
- Legal Advice: If unsure about the contract’s language or implications, seek legal advice to fully comprehend the rights and obligations associated with the “as is” clause.
In conclusion, when a property is sold “as is,” the buyer assumes the responsibility for its condition and any repairs needed after the sale. It underscores the importance of due diligence and careful inspection before entering into the contract. While the final inspection is crucial, it does not provide an opportunity for the buyer to request repairs, as the property’s condition was already agreed upon in the contract.
Contact your real estate agent for any issues that may arise
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