Move-in prior settlement?

[turboham]

Hi all,

Early last year, I bought my first ever property, an off-the-plan townhouse in Melbourne. Two weeks ago, the vendor informed me that the property is ready for final inspection in early March. Today, the vendor informed me that the plan for subdivision is likely to be in April and settlement will take place 14 days later.

I thought this is quite strange, how come there is such a big time gap between final inspections and settlement? I thought when it is ready for final inspections, it is probably ready for occupation and settlement should come quickly. Is this normal?

I am going to Melbourne next week for a 3 months break after a long overseas work assignment so I thought about the possibility of moving in prior settlement to save some short term accomodation cost. I have already got all the finance sorted out and like to hear any experiences first before requesting the vendor to allow me to move-in before settlement since it will be sitting there empty for most of my time in Melbourne!


Thanks!

 

[Ross Sneddon]

Hi Turbo

Different states, different laws but in simple terms settlement cannot take place until all the appropriate legals are in place such as council approvals, including Fire, Electricity, Main Roads etc, subdivision, registrations and all that.

When that is done, the purchaser must be given a period of time to settle. Sometimes 14 days , or 21 or 28 or whatever, before any penalty time period commences.

If you have all your finance in place and your solicitor is ready, you can approach the vendors solicitor and arrange to settle after notice and prior to the 14 day advice period. The day afgter if you want and they can agree.

Regards

Ross

 

[pjb89]

Hiya turbo

In my case the final council approvals came back later than was usual (due to a heavy workload apparently). My builder agreed that I could move my tenants into the unit prior to actual settlement and I was more than happy to let him be compensated for allowing this to occur as I had a tenant who had signed a 13 month lease.

We (builder and I) simply agreed that he would recieve the rent that I would have otherwise recieved. Whether or not it was legally correct etc with all of the implications I would be interested to know, however, I got my Property Manager to draft up a simple letter to this effect and got him to sign thus agreeing to it.

The contract was unconditional, with the only outsanding 'issue' being the outstanding title from the lands department if I recall. All other documentation had been recieved.

Pedro

 

[asy]

Hi Turbo!

You can certainly move in to a property prior to settlement, but you are deemed to have taken posession of the property when you move in.

This means that as at the date you move in, you accept the property in the condition and manner you find it. You will probably be asked to sign a form stating that you accept the property.

Please don't take this lightly, make sure you have the advice of your solicitor, especially as this is an off the plan unit, and as such there may be registration issues to consider.

hope this helps,

asy

 

[turboham]

Thanks for all the reply!

It looks like the best way is to wait patiently for the occupancy permit to be issued and then request the vendor for settlement to take place immediately without the 14 days wait since all the finances are all sorted out!