Did you know that when buying or selling property in NSW the parties to a contract may mutually agree upon terms for early possession of a property before completion takes place.
All NSW contracts for the sale and purchase of land contain standard provisions setting out the basic features of the terms for possession before completion.
There must always be a final inspection before purchasers enter into possession. Any problem with the property will then become the purchaser’s responsibility. The terms of early possession must be spelt out clearly either in the contract or if after exchange of contracts by written agreement between the parties.
The Seller’s Perspective
The granting of early possession is entirely at the discretion of the owner of the property and an owner cannot be forced to comply.
The Purchaser’s Perspective
Consider your needs to gauge whether or not you should negotiate terms for early possession prior to exchange of contracts.
Terms for early possession of a property
- You may elect to grant early possession entirely free of charge, free of charge for a certain amount of time or charge an occupation fee or rent from the date of occupation of the property to the date of settlement. The occupation fee may or may not be in line with current market rent
- Prior to the granting of early possession you must provide evidence of insurance before keys will be released to you
- You may be required to pay an occupation fee
- No change, structural alteration or addition may be made to the property and you must keep the property in good condition and repair
- You are responsible for ongoing repair and maintenance
- Periodic settlement adjustments are calculated as at the date of occupation and any occupation fees are adjusted as at the settlement date
Other Factors to consider
- If settlement is delayed the parties may negotiate terms for early possession
- If the contract is rescinded or terminated the purchaser must immediately vacate the property
This article is general information only and should not be relied on without obtaining further specific information.