When selling or purchasing property thinking about the condition of the chattels isn’t really the top of anyone’s check list. But for purchasers and sellers not being on top of the chattels can be a source of last minute settlement hold-ups.
What are chattels?
Chattels are any items of property that have been affixed to the home that you expect would come with the sale of the property. This can include, but is not limited to stove, fixed floor coverings, blinds and curtains, television aerial, dishwasher etc. Applicable items will listed in Schedules 2 and 3 of the ADLS/REINZ Agreement for Sale & Purchase of Real Estate.
So why is it essential that the chattels included in the agreement are in good working order? Clause 7 of the general terms of sale contained within the agreement is the vendor warranties and undertakings clause which outlines the responsibilities of the vendor in relation to certain aspects of the agreement. In particular, clauses 7.3(1), (2), and (3) provide for all chattels listed in the agreement on schedules 2 and 3 to be in reasonable working order, save for fair wear and tear.
If the chattels listed in the property are not in reasonable working order at the time of the pre-purchase inspection this can give rise to a claim for compensation by the purchaser, which can cause delays in settlement if an agreement is not reached.
From the purchaser’s point of view, it is handy to take note of the chattels, especially appliances that are to be included in the agreement for sale and purchase so you can make sure that they are the appliances that are in the home at the pre-purchase settlement. There have been instances where a vendor has replaced appliances, such as the stove top or dishwasher, with a cheaper less valuable item that was not present at the time of the open home and not the chattel that was intended to be in the agreement. At the pre-purchase inspection be sure to check that the appliances are all in working order and in a reasonable condition.
Settlement delays are a pain for everyone involved and can be costly for the party that is the cause of the delay as penalty interest charges can apply.
Vendors – make sure that your chattels are in working order and reasonable condition. Purchasers – at the pre-purchase inspect ensure that the chattels present are working, in reasonable condition and are the items that you are expecting to be there.