What happens if a seller switches items in a property before settlement?

For some sellers, once they have an unconditional contract the temptation of substituting say the Bosch dishwasher for a cheap A-Mart substitute is irresistible. 

What is your position as a buyer where you find the Seller has treated you in this reprehensible way?

The starting point is to look at what your contract provides. notes australian dollar money keys tenant deposit buy cost house property

Most contracts say that the property is sold with the inclusions as inspected and as noted on the contract.

If there is no specific notation in the contract that the sale eg. includes a Bosch dishwasher then it is a matter of proving what was in the property at that time.

That is extremely difficult unless you have photographed or videoed the house at the time you inspected it.

Only the hard core investors who have been burnt on this issue will have done this.

Therefore, from a practical perspective, if a property includes items of special value or expensive appliances then they should be specifically noted in the contract of sale as an inclusion so there can be no argument later.

A shrewd practise as an investor is always to tell the agent ten days out from settlement that you want to inspect the property the day before settlement.

This has the cunning psychological effect of keeping the Seller honest.

If they know you are coming the day before settlement to check the property they will really have second thoughts about substituting quality or expensive items in the home for cheap items.

Appliances to be in good working order

All too often the buyer arrives on settlement date and after settling in finds that when they go to cook their first meal, not all of the appliances are working.

Yet when they inspected the property, everything seemed to be sparkling and had the appearance that it was all in good working order. Man Signing Contract

This is another case of “Buyer Beware”.  

There is no standard provision in Contracts for the sale of residential property that says all appliances and equipment have to be in good working order.

It is therefore important to have your building inspector during the period of the building inspection to check that all appliances and equipment are in good working order and raise any defects with you before you sign off on the building inspection clause.

Alternatively you could add a clause to the Contract that provides that the Seller guarantees that all appliances and equipment will be in good working order on settlement and grants you the right to check their operation before settlement to ensure that this is the case. 

And whilst you are at it, make sure you get your inspector to check that all taps and plumbing are operational and in particular the shower and the bath are working.

It is very easy to cover up a bathroom with a serious water leaking problem by simply re-grouting all of the tiles, changing say any water damaged carpet leading into the bathroom from the entrance hall, then repainting any affected areas.

Once you have done that, all you need do is turn the taps off and not use the shower for a few months and everything appears to be ship shape.

Make sure that your building inspector runs a simple test by turning on the bath and shower taps.

Want more of this type of information?

Rob Balanda


Rob is a partner in the Gold Coast based law firm MBA Lawyers. He is a highly regarded educator of property investors and estate agents and the author of the "Made Simple" series of books and CD's.
Visit www.ClausesMadeSimple.com

'What happens if a seller switches items in a property before settlement?' have no comments

Be the first to comment this post!

Would you like to share your thoughts?

Your email address will not be published.



Michael's Daily Insights

Join Michael Yardney's inner circle of daily subscribers.

NOTE: this daily service is a different subscription to our weekly newsletter so...