Can I get the keys before settlement?
When you commit to purchase a property and sign a contract the waiting game begins! In NSW the standard completion time from exchange to settlement is between 28 to 42 days. That’s 4 to 6 weeks of waiting to move in. Sometimes a property may be vacant and available for occupancy. The questions can then be – when can I move in?
There can be risk to a vendor to hand over the keys to a purchaser before they have paid the final settlement amount so reluctance to release keys is common. There can be benefits to a vendor for allowing possession to a purchaser. The standard rule in NSW is that the risk of the property passes to the purchaser following possession. This means that if something happens the purchaser is responsible. A prudent conveyancer will also ensure that terms are in place and agreed upon making the purchaser liable for rates, upkeep and expenses. A purchaser is also prohibited from making changes or carrying out work at the property and should generally provide a copy of home and contents insurance mitigating potential perils.
There can be many different options and solutions. If a vendor will not agree on pre settlement access a purchaser can offer to pay a fee and sign what is called a Licence Agreement. Generally, a Licence Agreement puts in place terms and prevents the occupancy from being viewed as a tenancy which prevents the purchaser rights which a tenant might otherwise have – such as calling upon the owner to carry out a repair. A basic rule when taking occupancy is to have the purchaser carry out a final inspection of the property and confirm acceptance of the condition of the property preventing any claim.
If a vendor is unwilling to agree to allow pre settlement occupancy to a purchaser another option to consider is settling early. An early settlement can be achieved provided that any participants in the settlement are ready – including especially any incoming or discharging mortgagees. It is crucial for a purchaser to jump through any hoops promptly for their lender to ensure they are in the best position possible to complete asap.
Early possession can be beneficial and risky to both parties in a conveyancing transaction. For good advice an experienced conveyancer is a good call. KdM Conveyancing has worked through the good and bad of pre settlement possession over many years. Feel free to get in touch with us if you would like guidance.
Comments