In this newsletter, we’ll walk you through the critical steps to completing your pre-settlement inspection, ensuring everything in your property works as expected. We’ll cover how to address common issues like a malfunctioning oven or garage door, how to notify your lawyer, and the importance of serving notice to the seller in a timely manner.
In our case study, the garage door was broken, and the oven was not working.
What this newsletter will cover:
The steps to inspect the property, document any issues, and serve notice on the seller to potentially withhold funds for repairs.
What this newsletter will not cover:
The process of engaging a qualified property mediator to assess and determine the amount to be withheld. Instead, we will focus on how you can request withholding a specific amount based on your estimates.
PROBLEM: Pre-Settlement Inspections Are Often Left Too Late
Many buyers wait until the last minute to conduct their pre-settlement inspection.
Delaying this process reduces your ability to negotiate with the seller and withhold funds for unresolved issues.
Inspections should ideally be done at least one week before settlement to allow time for negotiation and resolution.
RISK: Last-Minute Inspections Can Lead to Out-of-Pocket Expenses
If you leave the inspection until the day before settlement, you may not have enough time to address any issues found.
The seller may refuse to fix problems, forcing you to pay for repairs yourself.
Once settlement occurs, it's too late to withhold funds, meaning you could end up covering costly repairs such as a broken oven or garage door.
CONTEXT: How to Serve Proper Notice
If you don’t serve notice at least the day before settlement, you lose your right to request that funds be withheld.
Here's how your lawyer should serve notice:
SOLUTION: Follow These 5 Steps for a Smooth Pre-Settlement Process
Notify Your Lawyer Immediately: 1) If you find issues, such as a broken oven or malfunctioning garage door, contact your lawyer right away via email. 2) Include photos and details of the problems so they can document your concerns under the Sale and Purchase Agreement.
Serve Notice on the Seller: 1) Once your lawyer is notified, serve formal notice to the seller outlining the cost to fix the problems. 2) This notice should include estimates for both parts, delivery and labour.
Research Replacement Costs: 1) For the garage door: Find a similar replacement online and calculate the cost, including installation and delivery fees. 2) For the oven: Do the same for the oven, ensuring all costs are accounted for in your estimate. 3) WARNING: The longer you negotiate back and forward on price, the higher your legal fee will be. At some point, you will need to accept a price reduction - even if it is not 100% what you wanted.
Timing is Key: 1) If you don’t serve notice by the day before settlement, you forfeit the right to request money to be withheld from the purchase price. 2) Plan your inspection early to avoid the stress of rushing at the last minute.
Ensure the Property is in Good Condition: 1) The property should be in the same condition as it was during the open home. One common point of dispute is cleanliness. 2) If you’re concerned, negotiate for professional cleaners to service the property in advance (before you satisfy your conditions), so you're not stuck with post-move-in surprises.
