What do I do: Issues discovered at final inspection?

5/23/2017
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Immanent Settlement; Have you discovered an issue, like damage or some defect that IS covered under your contract at the final inspection?
After recommending Legal Advice (since we are not lawyers). Often the quickest & cleanest way forward with a pending settlement is to arrange a “Payment in lieu” variation.

Something along the lines of;

“Seller:
Buyer:
Property address:
Contract dated:
______________________________________________________

The Seller and Buyer AGREE to vary the Contract as follows:-

The Buyer accepts the listed item(s) {list or see attached} as discovered at final inspection and indemnifies the Seller from any claim or action in this regard.

The Seller agrees to pay directly the Buyer the sum of ${Dollars} as payment in lieu of listed items and repairs to the property pursuant to the contract referred to above.

This payment in lieu will be a direct payment to the buyer.

The Seller and Buyer should seek their own legal advice prior to signing of this variation and indemnifies A1 Conveyancing and their staff from any claim or action in preparation of this Variation.

Signed Buyer X___________Witness X___________ Date ___________


Signed Seller X___________Witness X___________ Date ___________”

This often allows both parties to know exactly where they stand in regard to resolving the defect and allow progress with the immanent settlement in the cleanest way.

NB: Where a large reduction in the ‘consideration’ (Purchase Price) greater than $5000 is an outcome, then it would wise to obtain evidence of the price deduction from an Licensed Inspector/Valuer for Duty reassessment purposes towards proof of lower assessment of Duty by Office of State Revenue, otherwise Transfer duty will remain as per the previous Duty Assessment.
Payment in lieu is generally not used for such large sums, neither are they immediately considered a ‘price reduction’ nor change in consideration.  For small sums generally the Assessed Duty will remain unchanged unless all the conditions are met.

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