Effective final property inspections

Feb 26, 2023

The purpose of a purchaser’s final inspection is to ensure that the property is in the same condition as at the day of sale, subject to fair wear and tear. The day of sale is the date that the contract was signed by both parties.

During a final inspection (which is typically undertaken by the purchaser in the 7 days prior to the settlement date), the purchaser should inspect the following:

  • Damage: any damage to the property which has occurred after the day of sale, such as broken windows, holes in walls, broken taps, malfunctioning toilets, leaks etc.;
  • Cleanliness: the property should be tidy, including the removal of all debris and trash;
  • Landscaping: lawns should be mowed and gardens left tidy;
  • Services and Plant and Equipment: all services and plant and equipment, such as heating, plumbing, and electrical, should be fully operational (if operational at the day of sale); and
  • Fixtures and fittings: all fixtures and fittings (blinds, dishwasher, split systems, electric gates etc.) should be in working order (if they were in working order at the day of sale).

If items requiring rectification are discovered at the final inspection and are not rectified prior to settlement, most standard Victorian contracts for the sale of land contain general conditions which allow a purchaser to withhold an amount of up to $5,000 from the settlement proceeds due to the vendor, pending such rectification.

It is important for a purchaser to undertake their final inspection as soon as possible in the 7 days prior to settlement and to raise any issues identified during the final inspection promptly in order to give the vendor adequate time to rectify the issue prior to settlement. Purchasers should also keep their lawyer informed if any final inspection issues arise so that the purchaser’s rights can be appropriately preserved and protected prior to settlement.