General information, not legal advice. What you can do depends on your contract and your state. A conveyancer or solicitor can tell you what yours allows; the official pages are listed at the foot of this page.
The bathroom is where small changes show: a tap that no longer runs, a stain on the ceiling. The official pages treat a problem found on the walk-through in three ways, from a request to the seller to a law that lets a buyer end the contract when the home has been damaged so badly that it is unfit to live in.
Three levels of problem
Something has changed since the sale
VICConsumer Affairs Victoria says: “If, during the final pre-settlement inspection, you find that something is damaged or not working as it was on the day the property was sold, you can request a repair.”
QLDQueensland’s page for sellers says that if the home “isn’t in good condition”, the buyer can ask their lawyer to delay settlement until the seller fixes the problem.
Work agreed before settlement is not done
WAOn problems that building and pest inspection reports turn up, Consumer Protection WA says you are more likely to sort them out with the seller if you made those inspections part of the special conditions, and that any negotiation and agreement with the seller should be in writing, such as who is responsible for treatment and repairs and when they need to be completed. In WA, your settlement agent is expected to check that all inspections and other special conditions are completed before settlement.
QLD“Ask your solicitor if all other conditions of the contract have been met before settlement day.”
The home has been badly damaged
Victoria and Queensland each have a law for a home that is damaged or destroyed so badly that it is unfit to live in, before a set point near settlement: in Victoria, before the purchaser becomes entitled to possession; in Queensland, before settlement or the buyer taking possession, whichever comes first. Both are set out below, each in its own state’s terms.
The two laws on a badly damaged home
Victoria: Sale of Land Act 1962, section 34
Applies where a contract is for land with a dwelling-house on it and, before the purchaser is entitled to possession (or to receive rents and profits), the house is destroyed or damaged so that it is “unfit for occupation as a dwelling-house”.
The purchaser may then choose to rescind the contract by notice in writing to the vendor, or to the vendor’s legal practitioner or conveyancer, within 14 days after becoming aware of the damage. Money the purchaser has paid is refunded, and a contract term that tries to exclude or change the section is void.
Section 36 sets a limit: if the vendor restores the damage before the purchaser becomes entitled to possession or to rents and profits, the purchaser cannot rely on section 34 or 35.
Queensland: Property Law Act 2023, section 77
Applies where the land contains a residential dwelling that, before settlement or the buyer taking possession (whichever comes first), is “so damaged or destroyed as to be unfit for occupation as a residential dwelling”.
The buyer may rescind by notice to the seller before the earliest of settlement, the buyer taking possession, or the seller restoring the dwelling to its condition immediately before the damage. A seller who restores it must tell the buyer, and the buyer may then, after giving reasonable notice, inspect the dwelling.
On rescission, any amount the buyer paid under the contract must be refunded, and the section “applies despite any agreement to the contrary”.
Both sections turn on precise words, such as “unfit for occupation” and the moment of possession. Whether either applies to your purchase is a question for your solicitor or conveyancer.
Insurance between contract and settlement
VICConsumer Affairs Victoria says that even though the seller’s insurance may cover the property up to settlement, your lender will recommend building insurance from the date the seller signs the contract. Section 35 of the Sale of Land Act also deals with the seller’s insurance in that period: in some circumstances it can benefit the purchaser too, to the extent the purchaser is not covered by another policy.
ACTAccess Canberra’s guide says you should insure the property from the time contracts are exchanged, and that “It is generally accepted that risk of accidental damage is borne by the buyer from the time the contracts are exchanged.”
A structure that was never approved
ACTThe same guide covers a structure found to be unapproved after exchange: “If you become aware of any unapproved structure after the exchange of contracts, you can ask the seller to arrange for the structure to be approved. If the structure is not approved before completion of the sale, you may cancel the contract without paying any costs.”
Where each route runs
Every route above runs through your contract and, usually, through the people acting for you at settlement. A qualified building inspector can tell you what a fault is and how serious it looks; your conveyancer or solicitor can tell you which of these routes your contract and your state allow. For the measure each state uses, see your right to a final inspection; for the items on the list, what the contract says stays; and for the day itself, settlement day.