What happens when the Vendor agrees to fix an issue in the LIM Report as a “requirement of settlement”?
In our Blog, Tell Me What I Need to Know About the LIM Condition in the ADLS Agreement For Sale and Purchase Of Real Estate (ADLS Agreement), we discuss that the Vendor can agree to fix any issue in the LIM Report as a settlement requirement. So, how does this work?
What happens if the Vendor has not fixed this issue by the Settlement Date?
If the Vendor has not completed the required work and/or fixed the issue, the Purchaser has the following options available:
- Serve a settlement notice; or
- Agree to extend the settlement date to enable the work to be done.
What happens if the Purchaser serves a settlement notice on the Vendor for failure to fix the LIM issue?
Provided the Purchaser is ready, able, and willing to settle, the Purchaser may serve a settlement notice on the Vendor. This means the Vendor must settle on or before the 12th working day after being served notice (unless this period is over Christmas) (New Settlement Date).
What happens if the Vendor does not comply with the terms of the settlement notice?
If the Vendor is still unable to settle on the New Settlement Date, the Purchaser may do the following:
- Sue the vendor for specific performance to complete the sale; and/or
- Cancel the agreement and require the Vendor to repay the deposit and any interest for late settlement; and/or
- Pursue any other rights or remedies available to the purchaser at or in equity.
Is there anything else the Vendor must do?
If the Vendor needs to carry out any work at the property e.g. rebuild the deck, it also becomes a requirement of settlement that:
- the work is approved by the territorial authority (your local council); and
- the work is complete i.e. constructed and with a code compliance certificate, both before settlement.
