Articles - New Homes

What to look for at a pre-settlement inspection?

12th September 2019

What is a pre-settlement inspection? 

A pre-settlement inspection allows you to inspect the property before the final payment. Although this inspection is not compulsory, we highly recommend you do it. You will want to utilise this opportunity to check nothing has happened to the property since you first signed the contract. 

These inspections let you make sure everything on the property is up to safety standards and is working correctly. For instance, you have the right to ensure the pool hasn't turned green, the lawns and gardens haven't died and that the carpets or curtains haven't been removed.

What to check at a pre-settlement inspection?

When you are purchasing a new home, it can be easier to get excited and overlook the minor details. However, if you don't point out the faults of the house during the inspection, you may miss your opportunity to get them repaired.

Take your time when looking over the home for faults or defects. If your unsure of what you should be looking out for here is a list of everyday things to check.

  • All home appliances included in the contract, are in working order, this can vary from home to home, but in general, it includes:
    • The hot plate, oven, grill, and extractor fan
    • All lights 
    • Power points, TV antenna point, or internet point
    • Dishwasher 
    • Airconditioning or heating 
    • Smoke alarms 
    • Garage door and remote 
    • Home security or alarm system 
    • Pool pump 
    • Reticulation 
  • All plumbing should be in working order, including:
    • Toilets flush
    • Sink drains properly (not leaking) 
    • There is no damage or deterioration since the contract was signed
  • All other items included will depend on your agreement. But usually, fixtures, appliances, and curtains are considered part of the property and should be left in working order.
    • Make sure all agreed repairs have been carried out 
    • All rubbish has been removed, and nothing is preventing you from taking vacant possession 
  • You may also ask to see:
    • Where the hot water system is 
    • Where the gas and water meter is located
    • How to turn on the pool filtration, hot water systems and alarm panel
    • Request copies of any owners or operation manuals  

When do you complete pre-settlement inspections? 

Usually, the pre-settlement inspection is conducted one week before settlement day. But you are generally able to negotiate to when is most convenient for you and the owner.

Pro tip: You don't want to do your pre-settlement inspection to far away from your settlement date. If something gets damaged after the inspection, it is doubtful it will get it repaired. You also don't want to do it a couple of hours before settlement. You will need time to fix any outstanding issues that you may have missed or not been aware of. 

What happens if you find something wrong with the property? 

Be careful if you claim to have found new damage to the property; it doesn't necessarily give you the right to withhold on the settlement. You must prove that the damage breaches the conditions stated in the contract of sale. Deterioration may be a result of wear and tear, or the buyer may have missed it before they signed the contract.

If however, there is significant new damage to the property, the seller may be in breach of contract and may be required to repair the issues before settlement. Your Conveyancer or solicitor is the best person to talk to in this situation.