Help with 'access to prop during settlement' clause

[eggnog]

Does anybody have a standard clause they put into a sales contract that allows the buyer and any nominated parties (such as tradies, engineers, etc) to access the property and perform renovations during setlement.


Also, if I do perform these renovations and the property turns to a swan, can the vendor back out of the deal and keep the renovations to themselves.

Cheers

 

[Xenia]

Hi First of all let me warn you that most agents will not be open to the idea of letting you do anything on the property before settlement. I remember in real estate school being told to NEVER ALLOW THIS and to encourage the vendor not to accept a contract which allows access to the property for the purpose of altering it's structure.

It is OK to allow access to the property to look through ie allowing a property manager through to show tenants as long as the house is not touched.

Now, that's agents for you and they are not great at thinking outside the box, they are not investors or renovators so they tend to be terrified of things they don't understand or have any concept about.

If you do find an agent that will accept the clause, it will be something like:

A license to occupy the premises will be granted to the purchaser from the date this agreement is signed until settlement and the vendor agrees that during this full access to the premises the purchaser will carry out renovations to the property as they see necessary without the vendors approval or opinion on this matter.

Once an agreement is signed, the vendor cannot back out "legally"

all the best!

 

[eggnog]

Thanks xenia.

I know what you mean about RE agents. I'm finding them really hard to talk with and convey what I am looking for/require in a property.

 

[Pushka]

If I were selling a property I wouldnt allow that cause at all! There are so many risks - and too many fires result from 'tradies' during renovations. Liability and Insurance issues - there would be a bun fight (and subsequent delays to settlement) if something was to go wrong. And why would I allow someone access to my personal property before I had moved out. It is bad enough putting up with renovations when I am the instigator, but when someone else is doing them for their benefit - why would anyone allow it?

 

[wylie]

Last house we bought was empty and being sold by the daughter of the owner, who had gone into a nursing home. It had green fake grass carpet in the front room and "old lady" curtains everywhere and really bad carpet and lino elsewhere. It needed a good kick into this century.

We approached our solicitor to ask for access. She told us that she could almost guarantee the other solicitor would say "no" to early access and we would be better approaching the real estate agent to speak directly to the vendor's daughter (power of attorney for her mother - so we dealt with her).

We did this and had no problems. We got the real estate agent to do a letter authorising us to paint and pull up the carpets, which the daughter signed. We phoned the daughter to thank her and asked her to call in to see what we were doing. She did call in and told us verbally to do whatever else we wanted to do..... so we pulled out the bathroom and changed the bathroom door and removed a wall between the dining room and lounge. It gave us a head start timewise.

Once we started spending "real" money I started to get a bit worried, in case settlement didn't happen for any reason, but really the risk was very small.

Wylie

 

[Alanna]

Structural repairs are generally out of the question for all of the reasons outlined by others. I think that the clause you insert would depend on the state you are in and the form of O&A you are using, so I will let a REA in your state reply to that one.
You may wish to confirm however, in WA at least, allowing early possession of the property means going automatically to unconditional status on the contract and waiving the other conditions which you may have had in place, including finance. Make sure that you are in a position to do this before considering the other.

Regards

 

[Firsthomelooker]

Once an agreement is signed, the vendor cannot back out "legally"

The vendor will be in breach of contract but they can still back out, generally with very little cost to themselves other than legal costs to the purchaser. If you had done work to the property with their agreement you would have several legal avenues to go down contract/restitution/equity but it's fighting the battle not the winning or loosing that takes time and costs money, and if it was me I would carefully consider if the head start in the renovations was worth the risk.

 

[Vodka]

Now, that's agents for you and they are not great at thinking outside the box, they are not investors or renovators so they tend to be terrified of things they don't understand or have any concept about.

Ouch that hurts! Not all agents suck!

Cashflow Plus get yourself a good solicitor that understands what you need, be prepared and have the clauses written out for you prior to putting in an offer on a property, then give the clause to the real estate agent and ask them to add it to the special conditions. Make sure that everything is upfront when making the offer because once the offer has been agreed to then the real estate agent really can not help you to make adjustments to the contract. Any and all changes that you make to an already agreed to contract will need to be done through your solicitor and the sellers solicitor. Don't rely on real estate agents to write your clause for you because they do not have any idea of what to write and a good solicitor may be able to cancel the contract based on a poorly written real estate agent clause if the seller wanted to crash the contract for whatever reason.

If the sellers don't allow full access to renovate the property prior to settlement then request/negotiate several access visits in order to get quotes, at least you'll be able to get the ball rolling and be able to start the renos as soon as the property settles.

Once again get the right solicitor and get the clauses right from the beginning so that everyone knows where they stand and there will be no hiccups later and above all make sure that you are protected from any legal issues.

Good luck