The importance of the final inspection

When purchasing property, you (or a person nominated by you) have the right to inspect your property-to-be at any reasonable time during the week before and including settlement day.

It’s not compulsory but it is a good idea to do a final inspection as close as possible to settlement day.

Inspections are generally organised via the real estate agent.


Some contracts have special conditions requiring a certain period of notice to be given.

You only have a right to one final inspection, although you could still ask for the vendor’s permission for a further inspection.

If you do identify a problem during the inspection, the vendor should permit you a further inspection so you can ensure it has been fixed.

What should you look for?

You have a right to receive the property in the condition it was in on the day you signed the contract, fair wear and tear excepted, so look out for the following:

  • Is everything that was in working order still in working order?
  • Are the goods mentioned in the contract still on the property?
  • Has anything been damaged (other than through fair wear and tear)?
  • Is there rubbish left on the property?
  • Have the vendors (or tenants, if applicable) actually vacated the property?

What can you do about it?

If you identify a problem, then you have a couple of options:

If there is minor damage, this doesn’t give you a right to withhold settlement or withhold any funds at settlement.

First, you should confirm with your lawyer that the damage is actually in contravention of the contract and check with the agent to make sure there hasn’t just been a misunderstanding by the vendor that he or she is happy to rectify.

Even if the deterioration is more than ‘fair wear and tear’ (but still only minor), you are only entitled to take action after settlement.

General Condition 24 provides a procedure to allow an amount up to $5000 to be held back from the vendor and paid to a third party, provided the purchaser also pays an equal amount to the third party. Settlement can then proceed without delay and the dispute be resolved afterwards.

If there is substantial damage, the vendor is in breach of the contract and you can ask the vendor to fix the damage before settlement.

In this situation, a vendor cannot rescind or claim penalty interest if settlement is delayed. It may be appropriate to hold back of portion of the purchase price – talk to your lawyer about this.

Want more of this type of information?

Mira Stammers


Mira is a solicitor and CEO of Legally Yours, has been working as a lawyer since 2007 in both Melbourne and London, and founded Legally Yours with the aim of make the law more accessible and affordable for all Australians. Visit Legally Yours.

'The importance of the final inspection' have 2 comments

  1. August 6, 2014 @ 10:56 am Geoffrey Adam

    There is no legal right to an inspection in SA unless expressly permitted by the contract. The standard form contracts in SA do not include the right and purchasers should seek its inclusion.


    • August 6, 2014 @ 12:15 pm Michael Yardney

      You make a good point Geoffrey. In SA one must ask for that right before signing a contract. No reasonable vendor would refuse


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