A Grey Area in Property Contracts

When buying a property, few people fully understand every aspect of the contract, partly due to the terms that are used in it. This is why it is essential to have your property lawyers go over the contract and explain everything to you. Even then, they may miss something thinking it is obvious because they are used to it, whereas to the first home buyer especially, it may not be the least bit obvious.

One term that may seem obvious when given due consideration is often missed in amongst all the other terms and that is buying “as inspected’.  If the term is hidden amongst a lot of other jargon it can be less than clear – or people just don’t think about it. Even if they realise it means that the property they purchase will be in the same condition it was when they inspected it, they may not realise what the ramifications are.

In actual terms, it means that if something was broken or not working properly when you looked at the home, you can’t expect it to be fixed when you sign on the dotted line – or even before then. If the floors were in a dirty state or the flyscreen was torn when you inspected the property and agreed to buy it, the seller has no legal obligation to clean or fix it.

According to Clause 6. 1 (b) 2 of the General Conditions on the property contract all the seller is required to do is move their possessions, vehicles, chattels and rubbish from the property, leaving the property ‘chattels’ in place.

However, these days many more modern contracts contain specific clauses about what state the property should be in. To have them included, you might have to bring up what you want the condition of the property to be , not what it is when you inspect it. That means you’ll have to ask the owner or real estate agent if the owner is not there, for permission to flick on the lights and fans, check that the oven and dishwasher work and flush the toilet, along with turning taps on and off to be sure they all work properly.

It may be more difficult to tell whether the phone jack or electronic device charging points are working, but if you add that into the contract and find they are not, at least you’ll have a leg to stand on if they don’t work once you take over.

It’s still important for the buyer to make a more careful inspection of the place, rather than assuming it will be repaired before he signs the contract. Very often, there is so much to think of that the actual inspection is not given the care it deserves, then the buyer feels ripped off when he moves in and finds half a dozen things that need immediate repair.

A Grey Area in Property Contracts
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