"As is" clause and pre-settlement inspection

[sarahodesk]

Hi,

Newbie in this forum, so please excuse me if I ask any stupid question.

We are looking at purchasing a property in Perth and signed a contract for purchase that comes with an "as is" clause. The property was very messy (empty box everywhere, left over materials from seller's business, dogs poo etc.) when we visited the property during the regular inspection. Now that pre-settlement inspection is due in about 2 weeks time and the contract has "as is" clause,

1. Is it a reasonable expectation that the property would be in a tidy condition during the pre-settlement inspection as it should be at settlement? What if the seller does not leave the property clean when they leave after settlement?

2. What rights does the purchaser have in regards to the condition of the house, if any, after the "as is" clause comes into action? The seller provided a building inspection report.

Your advice would be much appreciated.

 

[sanj]

Hi,

Newbie in this forum, so please excuse me if I ask any stupid question.

We are looking at purchasing a property in Perth and signed a contract for purchase that comes with an "as is" clause. The property was very messy (empty box everywhere, left over materials from seller's business, dogs poo etc.) when we visited the property during the regular inspection. Now that pre-settlement inspection is due in about 2 weeks time and the contract has "as is" clause,

1. Is it a reasonable expectation that the property would be in a tidy condition during the pre-settlement inspection as it should be at settlement? What if the seller does not leave the property clean when they leave after settlement?

2. What rights does the purchaser have in regards to the condition of the house, if any, after the "as is" clause comes into action? The seller provided a building inspection report.

Your advice would be much appreciated.

1) no, i do not believe that is a reasonable assumption, i'd be surprised if the seller has bothered cleaning up

2) basically you have no rights in terms of condition of the house, unless you can prove the condition at settlement is worse than at purchase

when was the building inspection done?

 

[sarahodesk]

when was the building inspection done?

It was done in March this year

 

[Dazz]

Is it a reasonable expectation that the property would be in a tidy condition during the pre-settlement inspection as it should be at settlement?

No it is not. It is reasonable that the property is delivered to you "as is".

What rights does the purchaser have in regards to the condition of the house, if any, after the "as is" clause comes into action?

What rights would you reasonably think an "as is" clause would confer, other than "as is" ??

 

[NBS]

Ok,

I'll ask the silly question what did the building inspection report say. I always get nervious whenl a property is selling "as is"

Yes its a mess, cra& everywhere and usually THATS all you look at but "as is" is that "as is" did you get your own inspection done?

If all else is ok with the building (hidden) etc etc and what you see, is just that what you see.

If they clean it say thank you

Brian

 

[vaughan]

Ok,

I'll ask the silly question what did the building inspection report say. I always get nervious whenl a property is selling "as is"

Why? all properties are sold as-is.

If you find white ants after settlement: bad luck. If you find there is a freeway being built next door: bad luck. This is what the due diligence is for. This stuff needs to be searched for before the contracts are exchanged..

I went to an open house for a terrace in Surry Hills. Just happened upon it, turned out the auction was straight after the open house. Place look pretty nice. I had a quick glance through the contract and discovered this property encroached the neighbour's back yard: the big brick wall out the back was on THEIR side of the boundary, and they had built a wheely bin storage area that further encroached the neighbours. Pretty cheeky. I assume that at one time the two terraces must have been owned by the same family, or maybe they were just stupid.

This was all in the contract in black and white. I doubt any buyers even looked at the contract.

Anyway, the neighbours had all the rights in the world to knock it down any time they wanted.

 

[sarahodesk]

Ok,

I'll ask the silly question what did the building inspection report say. I always get nervious whenl a property is selling "as is"

Yes its a mess, cra& everywhere and usually THATS all you look at but "as is" is that "as is" did you get your own inspection done?

If all else is ok with the building (hidden) etc etc and what you see, is just that what you see.

If they clean it say thank you

Brian

Building inspection report says crack on tiles on balcony and rust from balustrade legs causing water leakage. Shower waste in the bathroom needs replacing and bathroom is due for renovation.

To be honest we do not expect much from the building itself. It is 30+ yrs old. It is a sub-divisible block and the land price is close to what we are paying for. Our plan is to hold and use this as an IP until the building becomes unsafe and is about to collapse.

 

[Ergophobia]

IMO it should be the same as when you signed the o&a

 

[wylie]

To be honest we do not expect much from the building itself. It is 30+ yrs old. It is a sub-divisible block and the land price is close to what we are paying for. Our plan is to hold and use this as an IP until the building becomes unsafe and is about to collapse.

I hope you don't leave a tenant in there when it becomes unsafe and is about to collapse or "as is" will be the least of your worries.

 

[Kent Cliffe]

This is actually quite complicated and a grey area because it depends on how the special condition for "as is" is written.

Under many agents "as Is" condition, you are entitled to the property "as is". So if they have TVs, furniture and all the other items left at the property - they are "as is" so you get to keep them too. However, practically the seller will take those. So why shouldn't they take their rubbish?

Because as is, you should get the property:

the Property will be in the same state and condition it was immediately before the Contract Date.

So if that includes furniture then they are silly for wording the contract like that.

The correct way I have seen the "as is" condition written if the property doesn't have a lease it is along the lines of:
"Item 6.1b of the Joint Forms and General Conditions does not form part of this contract. All vehicles, rubbish and chattles are to be removed at the sellers discretion."
(this isn't legal advice)

6.1b Without affecting the right of the Buyer on possession, where the property is not sold subject to a Lease, and subject to clause 6.3:
1) the Buyer is entitled to vacant possession of the Property; and
2) the Seller must remove from the Property, before possession, all vehicles, rubbish, and chattles, other than the Property Chattles.

However if it is just written like a normal "as is" clause:
"the buyer acknowledges that the property is sold on an as is basis."

Then if all the furniture and "good stuff" is taken and rubbish left, then you are entitled to demand compensation for the furniture not accompanying the property, "as is". Also, it could be possible to argue that the "as is" doesn't make specific reference to rubbish etc. However, in a practical sense good luck getting money.

The short version:
From seeing other people argue this in the past, if the "as is" special condition does not specifically reference rubbish then the buyer is entitled to seek compensation for other items taken. However, practically GOOD LUCK!

It is always Cost of Lawyers Vs Cost of Skip Bin .... Which do you think is cheaper?

This is never legal advice and you should always chat to a lawyer about your specific situation.

 

[Jtkumnick]

This is actually quite complicated and a grey area because it depends on how the special condition for "as is" is written.

Under many agents "as Is" condition, you are entitled to the property "as is". So if they have TVs, furniture and all the other items left at the property - they are "as is" so you get to keep them too. However, practically the seller will take those. So why shouldn't they take their rubbish?

Because as is, you should get the property:

So if that includes furniture then they are silly for wording the contract like that.

The correct way I have seen the "as is" condition written if the property doesn't have a lease it is along the lines of:
"Item 6.1b of the Joint Forms and General Conditions does not form part of this contract. All vehicles, rubbish and chattles are to be removed at the sellers discretion."
(this isn't legal advice)



However if it is just written like a normal "as is" clause:
"the buyer acknowledges that the property is sold on an as is basis."

Then if all the furniture and "good stuff" is taken and rubbish left, then you are entitled to demand compensation for the furniture not accompanying the property, "as is". Also, it could be possible to argue that the "as is" doesn't make specific reference to rubbish etc. However, in a practical sense good luck getting money.

The short version:
From seeing other people argue this in the past, if the "as is" special condition does not specifically reference rubbish then the buyer is entitled to seek compensation for other items taken. However, practically GOOD LUCK!

It is always Cost of Lawyers Vs Cost of Skip Bin .... Which do you think is cheaper?

This is never legal advice and you should always chat to a lawyer about your specific situation.

Keep some money in your budget for a couple of hours of professional cleaning, gardening and a couple of trips to the tip. Anything that you dont have to do will be a bonus.....

 

[sarahodesk]

This is actually quite complicated and a grey area because it depends on how the special condition for "as is" is written.

Under many agents "as Is" condition, you are entitled to the property "as is". So if they have TVs, furniture and all the other items left at the property - they are "as is" so you get to keep them too. However, practically the seller will take those. So why shouldn't they take their rubbish?

Because as is, you should get the property:

So if that includes furniture then they are silly for wording the contract like that.

The correct way I have seen the "as is" condition written if the property doesn't have a lease it is along the lines of:
"Item 6.1b of the Joint Forms and General Conditions does not form part of this contract. All vehicles, rubbish and chattles are to be removed at the sellers discretion."
(this isn't legal advice)



However if it is just written like a normal "as is" clause:
"the buyer acknowledges that the property is sold on an as is basis."

Then if all the furniture and "good stuff" is taken and rubbish left, then you are entitled to demand compensation for the furniture not accompanying the property, "as is". Also, it could be possible to argue that the "as is" doesn't make specific reference to rubbish etc. However, in a practical sense good luck getting money.

The short version:
From seeing other people argue this in the past, if the "as is" special condition does not specifically reference rubbish then the buyer is entitled to seek compensation for other items taken. However, practically GOOD LUCK!

It is always Cost of Lawyers Vs Cost of Skip Bin .... Which do you think is cheaper?

This is never legal advice and you should always chat to a lawyer about your specific situation.

Thank You Kent. Your advice makes sense and will help a lot. Much appreciated.

 

[sarahodesk]

Keep some money in your budget for a couple of hours of professional cleaning, gardening and a couple of trips to the tip. Anything that you dont have to do will be a bonus.....

Thanks for your suggestion. That is exactly how we are planning. We need to change the carpet, paint walls and do some reno anyway.