So, you have decided it is time to sell your current place and buy something new. It doesn’t matter if you are upgrading, downsizing or moving for a different reason, this can be an exciting time but also logistically hard. One of the biggest issues is that you will need to be moved out of your current property before settlement, but you are not able to move into your new place until after settlement.
There are couple of different ways to handle this:
- You can move everything into temporary storage;
- You can move everything on the morning of settlement and have your belongings sitting in a truck until after settlement;
- You can ask the buyer of your current property to allow you to stay longer in your current property; or
- You can ask the seller of your new property to let you move in early, this is called early possession and what we will be focusing on in this article.
Before you take or grant early possession you should be aware of your risks and obligations.
We have listed some of the risks for the Buyer as per the below:
- You are required to maintain the property in the same condition, this means you are unable to make any alterations to the property, including painting or landscaping and you must look after the property;
- If settlement does not occur for any reason or is delayed, you may be required to move out;
- You are only under personal licence which means that the seller can revoke your right to stay in the property at any time;
- You will be unable to change the locks; and
- If the property is damaged as to be unfit for occupation you will still be required to settle.
The list below highlights some of the risks for the seller
- You do not get paid for the property until settlement;
- If settlement does not occur for any reason, the buyers are already in possession and if they do not want to move out it can be difficult and expensive to get them to vacate;
- If the buyer has damaged the property and settlement does not occur for any reason, it can be costly to seek compensation from the Buyer.
If you think early possession may be useful in your situation please contact our office.
Early possession is often also sought where either party is unable to settled on the scheduled settlement date and arrangements have already been made in terms of removalists, leases ending, furniture deliveries, etc. In order for the seller to grant early possession they may request the following:
- a copy of the buyer’s insurance certificate for the property;
- the adjustments for outgoings (i.e. rates, water, body corporate levies, etc.) are adjusted on the possession date as opposed to the settlement date;
- the buyer to indemnify the seller against any expense or damages incurred by the seller as a result of the buyer’s early possession of the property;
- the buyer accept the property as is.
The standard Real Estate Institute of Queensland and ADL form contracts used in Queensland for residential purchases include a clause which buyer’s and seller’s may rely upon if requesting and granting early possession.
As the buyer is often required to accept the property as is from the time early possession is granted then it is important the pre-settlement inspection is undertaken prior to this time so any issues can be addresses accordingly.
If you are looking to request or grant early possession and want to ensure you understand the implications and your obligations then it is important that you speak with your solicitor assisting with your purchase or sale.
If you have any questions or require assistance with a leasing matter in Queensland, then please contact the property team at NB Property Law for more information.
Written by
Kayleigh Swift, Associate
NB Property Law
[email protected]
(07) 3876 5111
Kayleigh Swift is a Director of our Property team who showcases her expertise in Commercial and Residential property matters.. With a high level of experience in commercial and retail leasing, voluntary and involuntary purchase and sale acquisitions and property development matters, Kayleigh provides practical advice to ensure smooth property transactions.
Louise Misfud, Lawyer
NB Property Law
[email protected]
(07) 3876 5111
Louise Misfud is a Lawyer in our Property team who assists with various conveyancing, leasing and wills and estates transactions. Louise is very experienced in residential conveyancing and estate planning and administration and is a problem solver. She always provides efficient service to all her clients.