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Buyer started reno before settlement

Discussion in 'The Buying & Selling Process' started by Burramys, 27th Jun, 2016.

  1. Burramys

    Burramys Well-Known Member

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    A friend of mine sold an IP flat, settlement in a few days. On Friday there was a request from the buyer for access to measure the rooms. I've just found out that there was a lot of noise coming from the flat, and it seems like there was demolition going on. My friend did not give permission for any works, just measuring. While it's nice to get a head start, I'm not enthused about such works. There are insurance ramifications, and what if settlement does not take place? My friend and I have not seen the IP, and I'm hoping to arrange this in the next 24 hours.

    Views on the above would be valued, including any remedies.
     
  2. Mumbai

    Mumbai Well-Known Member

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    He can back off from settlement and keep the 10%
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    Not legal advice ;)
     
  3. Scott No Mates

    Scott No Mates Well-Known Member

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    Tell them that they will need to reinstate before you're prepared to settle.
     
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  4. Bran

    Bran Well-Known Member

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    I'd be talking to my solicitor.

    But I did exactly that on my last purchase. "Here's the keys". Ok thanks... renovation done pre-settlement.
     
    Last edited: 27th Jun, 2016
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  5. DaveM

    DaveM Adelaide Buyers Agent & KFC Strategist Business Member

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    How did they get keys? If the agent let the purchaser have them, I would be seeking remediation from their agency fees. It is a gross breach of procedure for a purchaser to be given unescorted access prior to settlement.

    In either case, locks should be changed immediately and settlement not effected until an agreement between all parties reached.
     
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  6. JDM

    JDM Well-Known Member

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    Provided there is no express notification of the works and the knowledge is merely someone hearing noise from the apartment why not just wait the few days until settlement and then see if there is an issue? No point making a big deal about it and incurring legal costs if settlement is so soon. My opinion would be very different if settlement was not for some time.
     
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  7. Scott No Mates

    Scott No Mates Well-Known Member

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    This is about risk mitigation - the OP still owns the property until settlement, the purchaser has carriedout unlawful works which will need to be remedied if the contract falls over.

    @Terry_w

    The sooner the issue is brought up, the better. Settlement is immenent and restitution/payment of damages, a matter of urgency.
     
  8. wylie

    wylie Moderator Staff Member

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    I'm guessing @Bran that you got authority that you could start works? We have done the same and almost finished a renovation before settlement (as we were flying out the day after settlement and wanted to get tenants).

    Has your friend gone into "his" flat to see what has happened? I'd be doing that as a start. Depending on what has been done, take it from there. I'm guessing there is a healthy deposit so that if it doesn't settle, whatever has been done (?) may be covered by that?
     
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  9. TMNT

    TMNT Well-Known Member

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    im going to put my hand up and say that ive done renos well before settlement,

    its a risk I took, 99% of the time it was fine,

    and yes if I cant settle then its going to cause lots of problems,

    why not just wait until settlement?

    if its a good reno, and they cant settle, youve got your self a good partial reno,
     
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  10. Joynz

    Joynz Well-Known Member

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    Did you do it sneakily or with vendor's permission?
     
  11. JDM

    JDM Well-Known Member

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    The best course of risk mitigation is just getting the keys back/changing the locks if the seller is concerned. If settlement is in a few days you're not going to prejudice your rights against the buyer because you didn't start Court proceedings before settlement.

    What's the remedy or damage you would be seeking? At best you would go for an injunction in which case getting the keys back/changing locks achieves this without the cost and aggravation of Court involvement. By the time any other proceeding get through Court (damages or reinstatement) either:

    1. Settlement will have occurred therefore the quantum of your damages is zero; or
    2. Settlement did not occur and you're in the exact same position as you were in a few days before settlement and can then consider remedies.

    As mentioned, my view would be very different if settlement wasn't so soon. Sometimes a practical approach is better than a heavy handed legal approach (this is coming from a Lawyer) and I believe this is one of those cases.
     
    Last edited: 28th Jun, 2016
  12. TMNT

    TMNT Well-Known Member

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    sneakily without vendors permission,

    I burnt myself once though, the rest were successful
     
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  13. CowPat

    CowPat Member

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    AND ??
     
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