The recent winter weather in Perth has proved too much for some homes, with storm damage causing many a seller last minute stress. But where do you stand when your home is damaged, and settlement is imminent?

Wind, rain and hail can all cause damage to properties – from leaking roofs, to overflowing gutters, to the extreme case of destruction that saw the roof ripped off a home in Perth’s north this month. Usually, for less severe damage, the home owner is able to fix it themselves, without much, if any, delay to settlement.

Assuming your Contract is like most in WA, and covered by the Joint Form of General Conditions, you’ll need to look to Clauses 8 and 9. The first step is to determine whether the damage is ‘major’ or ‘minor’.

Major Storm Damage

Major damage, as per Clause 8.2 of the Joint Form, is classified as damage or destruction that renders a residential property substantially uninhabitable. For properties other than houses, they must be unusable for their current use. Whilst it is rare for storm damage to be this severe, if you have been unlucky enough to experience this, you’ll need to give your buyer Notice of the damage.

Your Notice should give full details of the extent of the damage, and allow the buyer 15 Business Days in which they can choose to terminate the Contract. Should the buyer choose not to terminate the Contract within the specified time frame, a reduction of the purchase price will apply to the value of the damage caused to the property.

Minor Storm Damage

More common is for minor damage to have occurred, such as fences falling over or water damage to ceilings. In these circumstances, we rely on Clause 9.1(e) of the 2011 Joint Form & 9.1(f) of the 2018 Joint Form.  These clauses state that at settlement, the property must be in the same state and condition as when the buyer entered into the Contract.

Let your Settlement Agent and Real Estate Agent know what has happened, and the steps you’re taking to fix the problem. Hopefully you have enough time before the scheduled settlement date to have the damage repaired. However, if you find yourself short of time, you can request an extension of Settlement Date, subject to the buyer’s agreement, to allow additional time for you to return the property to its original state.

Another solution, which many buyers and sellers prefer, is to offer a credit of funds to the buyer at settlement, as compensation for the damage. For instance, if an old ‘Super 6’ or ‘Hardifence’ blows over, you’re only obligated to replace it with the same fence. However, your buyer may have plans to upgrade to a ‘Colourbond’ fence at some point in the future, and a credit of funds can help them towards this.

So, if you find yourself in a situation where your property has sustained storm damage before settlement, give the team at Metro Settlements a call.

We’ll assist you in negotiating with the buyer, and reaching the most favourable, and stress-free outcome.