Settlement Dilemmas

Interesting story today.

The property settled at around 3:30pm this afternoon. They agent refuses to give the keys to the new owners because the vendor was not ready to move out. They then asked for a couple more days for them to vacate the property and the buyer said no. They are ready to move and everything is already booked for tomorrow including the removalist as they plan to live there.

The selling agent decided to stop answering their calls and the buyer's solicitor called the vendor's solicitors saying that their client is now trespassing the new owner's property.

Ending. The vendor managed to moved all their stuff out by 7pm. Keys handed over to new owners. Settlement completed. The buyer was quite forgiving in this instance but what else could have been done, legally, if the vendor did not manage to move out today?

Now I know most settlement does not always go smoothly, but have you been in an extreme settlement issue like this?

 

I'd be interested in knowing the answer too

 

Police for trespassing?

Could / should have made a progress check prior?

 

That's what I thought as well. Its not their problem that the vendor was still not ready to move out.

 

Yes, I agree.. Apparently, the selling agent contacted them yesterday (Sunday) to ask if the vendor can rent for one week. They said no.

 

I believe in some states the previous owner has 24hrs after Settlement to leave which I thought was odd but seems to be a thing. I can't confirm or deny which States it is, I don't think it's WA.

 

When in NSW

You mention that the matter settled at 3.30pm before the Vendor moved all of their gear out at 7pm. In all instances, the purchaser ought to conduct a final inspection as close as possible to the settlement time. The quid pro quo in all settlements where vacant possession is required is that the Vendor vacates the property and provides both possession to the property and the certificate of title to the property in exchange for the $$$$$$$. A purchaser who proceeds to settlement and pays the balance of purchase monies when the seller is still in possession is very poorly advised.

 

I believe in WA the vendor gets till midday the day following settlement to move out. In any event if the vendor refuses to move out give notice that you are checking into a 5 star resort pending vacant possession and that you will be suing the vendor for the cost.

 

If the property was sold with vacant possession, you inspect and if not vacant, you do not need to settle or can agree to hold funds back.

I would not settle, because they could turn around and say we are not going.

Agent has nothing to do with this much & should act as directed by solicitor, not what they think morally.

Just IMO

 

What a terrible experience for the buyers. I'm sure they would have been excited about moving into their new home - and then to be confronted with this nonsense would be quite stressful.

The agent dropped the ball on this one - they can't expect to ask the buyers to grant a two day extension on the day of settlement.

Cheers

Jamie

 

Settlement should really have been held pending confirmation property was vacant and in a sound condition. Imagine if it was trashed. Who would have paid and whose insurance ? And if the occupants squatted and could not be evicted (it is a civil matter after all) there could have been costly issues to address with no recourse back to the vendor.

Buyer should have been better advised. Agent has no duty of care to a buyer

 

With our last property purchase, settlement was booked in for 2pm on a Thursday (in April 2016).

We had arranged with the REA to undertake a pre-settlement inspection for 11am the day before. It was an hour's drive from where we lived.

When we arrived, the property was a mess, with the vendor still living in the property. I told the REA that the inspection could not be conducted and the vendor would be hearing from her solicitor.

I phoned my solicitor who, in turn, called the vendor's solicitor. I don't know what was said - the pre-settlement inspection was re-scheduled to 11am on settlement day and, if the vendor hadn't vacated, the settlement would proceed but significant funds would be held back by our solicitor (sorry but I can remember the actual amount) to cover any issues.

The vendor "pulled her finger out" and must have worked through the night. At the re-scheduled inspection, the property was vacant and pristine .

 

Good outcome. How it should be.

Mate of mine bought a farm and vendor had mountains of crap piled up and didnt look close to going. Looked like everything remaining was intended to be dumped when the contract said ALL possessions and materials had to be cleared unless otherwise agreed. $5k retention later he still didnt clear it so it was a costly dumping exercise at vendors cost.

 

This is the correct process. It should be solicitor to solicitor (or in WA, typically Settlement Agent to Settlement Agent).

 

When I called my solicitor, I did make one mistake.

I said: "We need to organise ANOTHER pre-settlement inspection".

She said: "Under the contract, you are only allowed one inspection".

I said: "WTF" (in my best French ).

She correctly asked: "Did you say the vendor stopped you from undertaking a pre-settlement inspection?".

I meekly replied: "Yes".

 

Agreed! Why would you settle if the vendor didn't move out?

I always have two pre-settlement inspections. One 48 hours before scheduled settlement, one ON the day of settlement at 12pm (this is so I can call my solicitor and tell them to stop settlement if no one has moved out).

For my sisters place when she bought it, the contract clearly said "vacant possession".
We drove past the place every few days in the fortnight leading up to settlement.
We saw no boxes out on the front (ie signs of people moving out).

Settlement was on a Wednesday and on the Friday before, I called the selling agent and asked what was going on. Turns out the tenants called up the agency to ask if they can stay 2-3 weeks after the scheduled settlement date and the PM (same agency as the selling agent stupidly agreed). Here's how the telephone call transpired:

Agent: This is normal, after settlement, we'll pay the rent to you. The tenants will move in 2-3 weeks.
Me: No, the contract says vacant possession. We're not settling until its vacant.
Agent: [Condescending tone] Are you sure? I'm pretty sure it doesn't.
Me: Yes it does, check it again.
Agent: [Calls me back after an hour] Settlement will be delayed for 2 weeks.

Drove past the house a every few days afterwards, sure enough there was rubbish outside for collection

 

Totally agree with this one. Poorly advised and bad actions from the vendors solicitors. The buyers should have prepared as well and done checks prior to settlement.

 

I would also put up a rocket to the buyers solicitors as he should comfirmed that it was vacant