Prior possession- Certainty of property access & move in date, but at what cost?

3/9/2018
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“Buyers can generally move into the property once settlement has taken place, unless the Seller occupied as their ‘principal place of residence’ immediately prior to Settlement. If this is the case the seller may remain until noon on the day after settlement.
However, buyers sometimes reach agreement with the seller to move into the property earlier than the settlement date. Buyers who are considering taking possession of a property prior to settlement may be asked to sign a form which states that the buyer agrees to take the property ‘as is’, and a statement that the buyer makes their offer unconditional.
Consequently, the seller may not be required to fulfil any special conditions which have been inserted into the O & A.
Both the seller and the buyer should seek legal advice about the potential problems that could arise from prior possession and consider the risks carefully.”

 


If you wish to gain property access sooner, than Settlement; there is a standard REIWA variation form called ‘Possession Prior to Settlement’, but this form should only be considered after completing your property inspection and your being certain of Settlement proceeding, since access to the property commits you to the Duty liability even if you later terminate the contract.

This form may additionally be used to ‘vary’ other conditions; like change your Settlement Date, and is sometimes used to enter into a rental agreement to entice the Seller of accepting your early access.

But you could additionally exclude the right to charge penalty for your delay if agreed ‘in writing’.

Possession prior to Settlement likely means that the buyers Duty liability will be payable no matter what happens after that.
Usually there is a requirement of Insuring the property in favor of the Owner till Settled. Often at the cost of the buyer, may need to investigate ‘Landlord/Rental property’ insurance, since most insurers only protect insured that meet their certain conditions.

Additionally your contract may become a ‘terms contract’, altering the obligations on both parties.
Seek legal advice with regards to your specific circumstance.

Please keep A1 Conveyancing informed if you DO gain early access to the property.

Source:https://www.commerce.wa.gov.au/sites/default/files/atoms/files/propertysettlementfactsheet.pdf  & also the Joint Form of General Conditions.

 

Delay in settlement – What are my options?

Once either party (seller/buyer) are ready to settle, but the other party cannot settle on or within three (3) business days of the Settlement Date (per the contract), the delaying party is liable to pay penalty interest to the non-default party.

Interest/Compensation is calculated on a daily basis on the balance of the Purchase Price and other money due to be paid on settlement, and is charged from the earliest of offical Settlement Date or serving Notice of being Ready Willing and Able to settle.

The rate of interest/compensation is set down in the General Conditions and may be deducted by the defaut party from the money owed.
If either party refuses or is not able to complete settlement, you should discuss the matter with your settlement agent or solicitor. The Default Party may also be served a Default Notice at the default parties cost.

Often retaining the right to charge delay interest/compensation is enough to ensure ALL parties expediate Settlement.

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