House Flooded prior to settlement - vendors NOT remedy damage, made to settle.

[treewx]

Hi, hoping someone can give me some clarity on what just happened.

This last Friday I did a pre-settlement inspection and discovered that a pipe had burst and top level had flooded. It had flooded for quite a while, there was mold growing on the carpet. Damage included: flooring, floor coverings, GIB wall linings, vanities, carpet and all been damaged and need replacing as a result.

Today (settlement day) I suggested holding back some money to ensure that they will remedy the damage or maybe reduce the price and I will organise tradesmen to fix it. The Vendor said no to both of these options and their lawyer advised that I must settle today and in full.

Upon talking to my lawyer, they said that yes I needed to settle today and if I wanted to get compensation for my damaged house that is something I need to do after settlement - although it will likely cost a bit given lawyers costs etc. They said, cause I didn't get a builders report, I have nothing to compare that water damaged property to.

My question is. How can this be?? It seems completely unfair. I signed up to buy a house, in similar condition to how it was when I went unconditional, yet here I am with a soaked house and facing a bill of about $15,000-$18,000.

Can someone please help? In this correct is my lawyer correct? I feel like I should have been allowed to withhold some money. If she is right, any advise on how I can go about getting money for the work I now need to do?

Many thanks.

[Wuket]

What agreement are you using? A reasonable sum to remedy should have been deducted from the purchase price... not something you need to try and chase and get out of the seller after settlement! And if you couldn't agree then a stakeholder (ie their lawyer or yours) need to withhold an amount until the figure is confirmed.

Personally I would have argued the whole thing was uninhabitable and withheld settling as a result.

Really don't understand your lawyer's advice. Read clause 5 of your agreement if using standard form ADLS.

[spaceman]

Crikey I think you need to get a better lawyer.

Ask yourself this, what is the point of an pre-settlement inspection, if when you find something wrong you can't do anything about it.

Agree with wuket … 5.2(1) a ...basically settle less an amount to cover damage …… 5.2(1) b ...cancel settlement and get your money back (paraphrased)

I would go at first to a senior lawyer in the firm you are dealing with and point out the incompetence of your current lawyer and suggest they need to get things sorted to your satisfaction post haste.

If nothing happens on that front I would go to the law society at get some redress from them over your lawyers failings.

Good luck

Cheers
spaceman

[jimO]

until handover its their house surly their insurance should cover it

[klauster]

As said, until settlement it is the vendor’s house covered by current insurance.
Settlement inspection – if the conditions have changed, the vendor is in charge to remedy.

In those cases I did several times successfully offer a “Deed of Variation” to the S&P agreement to accommodate a new settlement date and the conditions for remedy, signed before any payments.

[Meehole]

Be interested to know what happened. Any update available?