Off The Plan Apartment Purchase - Settlement/Final Inspection Issue

SpotTheOzzie on 27/05/2017 - 09:33

Hi Gang!

Have an Off The Plan Purchase conundrum.

The Settlement date was September 2016. Every month it has been delayed till this month where they finally said 24th May 2017 is settlement day.

We have been trying to organise the final inspection. On the 19th May we were informed by the people working on the people that there's no way we can do the final inspection before the 24th May because the apartment is not ready (needs coat of paint, defect overhaul, clean).

We are still pressured into Settling on the 24th May and I put my foot down saying we're not settling until we see our apartment. They get funny about it but eventually agree with us. So yesterday we were informed we can inspect our apartment today (27th May) and Settlement will be 29th May.

We know some other tenants who have settled without inspection but have not been able to move in due to some major issue 'water piping on their side' and have now shot themselves in the foot with no leverage.

The other problem we have is that in November 2016 we decided to go with another bank instead of the big 4 at a better rate because we now had 20% deposit which opened up options due to the delay in settlement. It's taken 7-8 months in the long approval process (very painful - another story for another day) but this will not be ready until 31st May 2017 which mean if there are no defects we won't be able to settle on 29th May. We put this scenario to the solicitor who said well if we can't settle on 29th May that means settlement date rolls back to 24th May and we'll have a rollback of fines but we should consider ourselves lucky because we won't lose our 10% deposit. That doesn't sound right. How can they say settlement was the 24th May but the apartment not ready to inspect? I was hoping they would have a leeway of two days and be happy we settled on the 31st May with no fines since we've been extremely patient and considerable due to these lengthy delays.

Questions are:
Can they legally roll the settlement date to prior the final inspection and fine us for each day?

What defects should I be keeping a close eye out for?

If we find the property during final inspection in (4-5hours) has defects should we settle?

Can settlement date literally be 2 days after final inspection occurs? I thought there would be more of a buffer?

Thanks!

Financial

Comments

  • ChunkyToast on 27/05/2017 - 11:12
    -1

    From a legal point, why would you seek advice in OzB when your solicitor gave you his advice? The person is not qualified?

    • SpotTheOzzie on 27/05/2017 - 11:29

      My partners solicitor not mine, first time dealing with him.

      Perspective, 2nd Opinions, other peoples experience.

  • Toons on 27/05/2017 - 11:50

    i wouldn't settle till you're happy. check everything to the specification of what you signed. if it's not ready it's not ready.

    I also thought it since they have delayed you non stop it would have had to have been done at a time agreeable by you.

    Call them up arrange another time due to unforeseen event stopping you getting there. -Car got a flat-

    Speak to real estate institute or look online to see what guidelines they have for settlements

    they might have templates that you can use as a guide.

    • pais on 27/05/2017 - 17:15

      i wouldn't settle till you're happy.

      Most issues will be covered in a maintenance period (post-settlemtn), not sorted pre-settlement. You can't just not settle until you're happy without incurring expenses.

      • Toons on 29/05/2017 - 00:59

        You might be surprised when money is involved. i had everything written down that needed doing and confirmed in writing before settling. what had to be done before handover / moving in. vs what could be done post.

        I can say this from experience with off the plan appartments, it all ends up in a who did what to who and the maintenance period is shot. Architect blaming builder, builder blaming tradies, tradies not fixing it till they get paid because they built to plans given, not the thousand or so variations agreed by builder and architect trying to bring the cost of the overblown project down.

        and i'm also referring to the points above people settling without seeing it

        We know some other tenants who have settled without inspection but have not been able to move in due to some major issue 'water piping on their side' and have now shot themselves in the foot with no leverage.

  • ozyhsk on 27/05/2017 - 12:22

    I have 2 off the plan properties previously and from my experience the contracts we are for developers safe guard and we buyers have no protection of any kind…

    But in your scenario t seems weird to settle without inspection…

    This is a general rule that few weeks before the settlement the customers are allowed to inspect and if any major defects founds settlement can be delayed without fines… now what are major defects that definition is a bit ambiguous… what I understand and saw was if any contract item is missing like kitchen appliance, normal door instead of sliding missing splash back, design different from what's in plans is major… rest customers have to present and both parties have to agree on…

    Just a suggestion hire a professional building inspector …. their reports stands a lot more wait then your own … they charge 400-500 but totally worth….

    Best of luck

    • SpotTheOzzie on 27/05/2017 - 13:07

      Thanks matey. Is it odd that the first business day after inspection is settlement?

      • ozyhsk on 27/05/2017 - 14:07

        No it is possible unless it was specifically mentioned in the contract that the inspection will take place a week or so before settlement but I usually haven't seen such a case …. again as I mentioned the contracts are in place to safe guard developers not customers so anything possible …

        One thing you could do is if they are forcing you to settle… then through you conveyancer send the developer a letter stating you are setteling under protest stating all the reasons and then if something goes wrong you will have a legal document

  • chumlee on 27/05/2017 - 13:35

    I wouldn't settle without inspection first.

    Do the have occupancy certificate etc?

    I'm sure a good conveyancer or lawyer can push the date back a few days. Happens all the time. The financial loss to the seller is normally to small to worry about legal action for delayed settlement

  • garetz on 27/05/2017 - 13:41

    I'm abit confused here, so the original settlement date was September 2016, yet it was pushed back multiple times, was it pushed back because of them ? or yourself.

    If they are threatening fines for 2 days over for you, why cant you fine them for each day from September to now if they were the ones pushing the settlement back?

    Do you know anyone who is a tradie or in the industry ? Family or friends, ask them for a favor and bring them along, their point of view, and knowing what to look for will be 100x better than you looking for defects if you have no experience.

    If you find defects, never settle until its fixed to the specifications you agreed upon.

    • ozyhsk on 27/05/2017 - 14:09

      Usually off the plans contracts have a sunset clause where they can push back the settlement …. usually its 5 years the sunset clause

      These contracts are made by the developers to safe guard them and not the customers …

    • djkelly69 on 27/05/2017 - 14:35
      -1

      If you find defects, never settle until its fixed to the specifications you agreed upon.

      Most defects/maintenance conditions will specify that you can't delay settlement on the basis of minor defects which will be covered under your 90 maintenace period.

  • dcep on 27/05/2017 - 15:45

    Can they legally roll the settlement date to prior the final inspection and fine us for each day?
    It's more of .. if you can't settle at 29th means you can't settle at 24th which is their original call for settlement date.
    So, unless you got written notice from them stating your settlement date is 29th, else 24th will still be their original call for settlement date.

    What defects should I be keeping a close eye out for?
    Like what others mentioned, only major defects can delay your settlement. Major defects means 'not safe to move-in'.

    If we find the property during final inspection in (4-5hours) has defects should we settle?
    Refer above.

    Can settlement date literally be 2 days after final inspection occurs? I thought there would be more of a buffer?
    What does your contract says ? If nothing, then can be anything.

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