Purchaser’s Right of Inspection before Settlement

Most purchasers would be aware that Clause 3.2 in an Agreement for Sale & Purchase of Real Estate provides that if the property is sold with vacant possession then the Vendor shall permit the Purchaser or any person authorised by the Purchaser in writing, upon reasonable notice, to enter the property on one occasion prior to the settlement date to examine the property, chattels and fixtures included in the sale.  If the property is tenanted, the Vendor as the Landlord will need to obtain prior consent of the Tenant, which may not be unreasonably withheld.

However, most purchasers may not be aware that if the property is sold subject to a residential tenancy then the Purchaser has no statutory nor contractual right to force the Vendor to make arrangements for or to allow a pre-settlement inspection of the property.  It is therefore essential that Purchasers of a property sold subject to a residential tenancy take appropriate steps to protect their rights and interests prior to entering into the agreement and prior to settlement.

What these steps would be may vary depending on the circumstances.   Make sure that you talk to our property team so that you receive practical advice as to what steps can be taken to minimize your risks.

(This article is based on the provisions contained in the 11th Edition 2022(3) of the REINZ/ADLSI Agreement for Sale & Purchase of Real Estate.)