Damage between exchange and settlement?

Discussion in 'The Buying & Selling Process' started by Oscar123, 10th Dec, 2018.

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  1. Oscar123

    Oscar123 Member

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    Hi all - how would you check for any damage that occured between exchange and settlement in a strata block? I doubt the vendor would give the purchaser access to the strata for this sort of check?
    Should i be booking a building inspection?
    Thanks all!!
     
  2. The Y-man

    The Y-man Moderator Staff Member

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    Not quite sure the meaning of this question - we always do a pre-settlement inspection

    The Y-man
     
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  3. Oscar123

    Oscar123 Member

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    Thanks for your response and apologies if the question wasn't clear! I meant checking for things such as damage which might have occured to common property between exchange and settlement that needs to be fixed out of strata funds e.g. a neighbour damaged the concrete in the garage, or a storm caused flooding in basement. How can i find out these types of issues?
    A pre settlement inspection may not pick up these things, I just want to avoid settling and then realising I am on the hook for damage done between exchange and settlement.
     
  4. Guest

    Guest Guest

    Do you have a reason to think something may have occurred?

    Depending on the circumstances both of your example events could be covered by insurance.

    Is there any clause in a typical sales contract would hold the vendor liable for covering their portion of expenses for damage occurring to common property between contract signing and settlement?

    You may be able to have your conveyancer / solicitor speak with the strata manager to check for any events during that period? When I went to contact the strata manager on one occasion (after contract signing, before settlement) I wasn't able to request information (for privacy reasons), they advised me to request it through the conveyancer.
     
  5. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    Damage to common property would be the responsibility of the strata corporation to rectify and as a new owner you can push to have that completed. The common property should also have appropriate insurance.

    A well run strata corporation should also have a sinking fund which could be used to cover what insurance doesn't. From your perspective this isn't going to cost anything because until settlement, you've never actually contributed to that sinking fund.
     
  6. Oscar123

    Oscar123 Member

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    Thanks all for your advice!

    @Peter_Tersteeg - understand that funds to fix damage to common property will come out of the strata sinking fund, however i don't want to be in a position of having to pay special levies for this damage in case the sinking fund is insufficient. I just want to check the extent of any damage given there has been some very bad weather in the area in the last couple of weeks.
     
  7. Marg4000

    Marg4000 Well-Known Member

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    Does your contract allow for this?
    Marg
     
  8. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    I guess the only way to really confirm this is to attend the pre-settlement inspection and check. If you really feel it's necessary you could get another building inspection (they might be able to refuse this request though).

    Another thought is that if not already provided, you're probably entitled to a copy of the strata corporation minutes and financial statements (you would be in Victoria, request via your conveyancer). That would at least give you some guidance on how much of a position the SC is in to deal with such events.

    It may also be a bit pointless to worry about this. If you've exchanged contracts and something has happened, there might not be much you can do other than settle the property and deal with the problem. You may not be able to get out of the purchase regardless of what may have occurred. You'd need to consult your conveyancer about this.
     
  9. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Even if there is damage to the common property before settlement, what recourse would you have?
     
  10. Stoffo

    Stoffo Well-Known Member

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    If the damage occurred prior to settlement, and a special levy was was voted for prior to settlement but no due to be paid until after settlement, then whom would be liable ?

    I see the concern of the OP, I went through a similar issue with water damage, it was noted well prior to my purchase in the same complex, yet I was lumbered with the special levy shortly after settlement (I wasn't happy, as none of it was listed in the strata minutes)
     
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  11. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    I am not sure, I would think the new owner if it is payable after settlement. But the terms of the contract would need to be considered.
     
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  12. Hosko

    Hosko Well-Known Member

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    What if these things happen the day after settlement?
    If you are going to own the property for 10 years (3,650 days) we are talking about a 60-90 day window for something that might happen.
    If there is money in the sinking fund that is a good start and you should be able to obtain this fact prior to purchase
     

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