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Navigating Early Possession Before Property Settlement, or ‘Agreement for Possession Prior to Settlement’

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Whether you are buying or managing a home, buying or managing commercial property, or in need of an experienced chartered builder for consulting services, ProConsult Building Inspections has you covered.

Timing is everything when purchasing property. Are you caught between the end of your lease and the extended settlement date for your new property? Was there a delay with your finance which has subsequently extended the settlement date and you need to be out of your current home before then? Or perhaps you want to get the keys early to get a head start on the moving process. Whilst it is rarely used, there is a standard REIWA annexure, “Agreement for Possession Prior to settlement”, which allows the buyer to gain possession of the property before settlement, so long as both parties agree.

When taking prior possession, however, there are several items that need to be considered and agreed on. You need to ensure you have the necessary insurance cover for the property, you will need to agree with the seller who will be responsible for the outgoings (this can usually be clarified in a rental agreement), you must not make any alterations to the property and you may need to pay rent to the seller.

Another crucial point about taking early possession is that you are agreeing to take it in the condition it is in when you get the keys and you will not be entitled to rely on any pre-contractual or contractual representation made by the seller. If anything should happen between when you get possession and settlement, for example the hot water stops working, the air-con doesn’t blow cold air or a light bulb blows, the seller will not be responsible to fix or replace these items. Although gaining access to the property before settlement may seem like a helpful idea, there are risks involved with this process and we highly recommend you seek legal advice from your settlement agent about the potential problems that can arise from early possession and to ensure you understand your rights.


To summarise, understanding the agreement is crucial, and there are some catches/risks, but there are ways to work around timing issues. Here are some of the standard issues to consider:

  • Insurance: Make sure you’re covered. You’ll need adequate insurance for the property during your early possession.
  • Responsibility for Outgoings: Agree with the seller on who will cover ongoing costs such as utilities. This is usually clarified in a rental agreement.
  • No Property Alterations: Until the settlement is complete, don’t make any changes to the property.
  • Rent to the Seller: You may need to pay rent to the seller for the duration of your early possession.
  • Property Condition: Remember, with early possession, you’re agreeing to take the property as is. If the hot water system dies or the air-con starts acting up, the seller isn’t obligated to fix it.
  • Legal: From unclear terms to unexpected issues, many things can go awry. Get legal advice.

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