Pre-Settlement Inspection in Queensland: Agent Obligations and What Happens If There Is a Problem

The buyer calls at 4:30pm the day before settlement. They’ve just done the walkthrough and the built-in dishwasher is gone, there are deep gouges in the hallway floor where the sellers moved furniture, and one of the bedrooms smells of water damage that wasn’t there before. Settlement is tomorrow morning. What do you do?

Situations like this are not uncommon — and how a Queensland agent responds in those critical hours directly affects whether a deal completes, whether the principal faces a complaint, and whether both parties’ interests are properly protected. Understanding your pre-settlement inspection obligations — and what happens when something goes wrong — is essential professional knowledge.

What the Pre-Settlement Inspection Actually Is — and What It Is Not

A pre-settlement inspection is the buyer’s final opportunity to view the property before ownership officially transfers. It typically occurs within a few days before settlement and serves a specific purpose: to confirm the property remains in the condition it was when the contract was signed, allowing for reasonable wear and tear.

This is a critical distinction for agents to communicate clearly. Unlike the building and pest inspections organised earlier in the buying process, the pre-settlement walkthrough is not about uncovering hidden structural problems. Instead, it ensures the seller has met their contractual obligations right up to handover. Buyers who arrive expecting to re-evaluate the property are asking for the wrong thing. Buyers who arrive prepared to verify contractual compliance are doing exactly what the process is designed for.

While buyers are not legally required to conduct a pre-settlement inspection, it is a sensible precaution that many choose to take. Agents acting for sellers should never discourage the inspection — doing so creates risk for all parties and has no contractual basis.

The Contractual Basis: Clause 8.2 and the REIQ Standard Terms

The right to inspect is embedded directly in the standard contract. When purchasing a residential house and land, or a residential lot in a Community Title Scheme, the REIQ Standard Contract provides the buyer with an opportunity to inspect the property prior to settlement. This right is found in clause 8.2(3), which specifically permits the buyer to enter the property on one occasion to inspect the property before settlement.

That word “once” carries significant weight. Because the buyer is only granted one opportunity under the standard REIQ Contract to inspect the property, conducting the pre-settlement inspection too soon before settlement may provide the seller with an opportunity to cause or not repair damage to the property. The practical implication: agents should advise buyers to schedule the inspection as close to settlement day as is feasible. It is recommended buyers aim to conduct their pre-settlement inspection as close as they can to the settlement date and no later than the morning of settlement day. This allows less margin of error for new defects to arise between the inspection and settlement.

Queensland buyers are entitled to inspect the property within 5 business days before settlement under the REIQ standard contract. The contract does not entitle the buyer to unlimited inspections or to bring contractors in for assessments at this stage without separate agreement. Clause 8.2 also provides access for smoke alarm compliance checks — clause 8.2 has been amended to allow the buyer to enter the property to inspect whether compliant smoke alarms have been installed.

Clause 8.2 is where a buyer and his or her authorised agent is entitled to access the property for the purposes stated in the clause. Clause 8.3 sets out the seller’s obligations from the time the contract is signed until the settlement date.

The Seller’s Obligations Between Contract and Settlement

The seller’s duties during the contract period are often misunderstood. Queensland operates on a risk allocation model that surprises many interstate buyers: REIQ contracts provide that the property is at the buyer’s risk from 5:00pm on the first business day after the contract date. This means buyers must insure the property from an early stage in the process.

However, risk of loss through events like storm or unforeseen accident is different from risk of the seller causing damage. The contract includes a provision for the seller to use the property reasonably until settlement and not to do anything that will result in later expense to the buyer. This means that sellers are liable for any damage, excluding fair wear and tear, to the property until settlement.

The standard contract language is explicit on this point. The seller must use the property reasonably until settlement. The seller must not do anything regarding the property or tenancies that may significantly alter them or result in later expense to the buyer.

The combined effect of these provisions matters for how agents advise their seller clients throughout the campaign and lead-up to settlement. The effect of reading the standard clauses together is that the buyer is responsible for fair wear and tear to the property, and any non-fault-based damage or disaster affecting it. But if a seller wilfully or negligently damages the property, they are liable to the buyer for that. Agents should make this clear to sellers before they begin moving out — furniture removal is one of the most common sources of pre-settlement damage disputes.

What the Seller Must Have Ready at Settlement

Beyond property condition, several specific compliance items must be attended to before settlement under the current REIQ contract. The REIQ Contract has been amended to impose a contractual obligation on the seller to install compliant smoke alarms prior to settlement. If smoke alarms are not installed, the buyer will be entitled to an adjustment at settlement in the buyer’s favour of 0.15% of the purchase price. On a $900,000 purchase, that is a $1,350 adjustment — not enormous, but easily avoidable.

Pool compliance carries a higher consequence. The new REIQ contracts impose an obligation on the seller to provide a pool compliance certificate for a non-shared pool at settlement unless a Notice of No Pool Safety Certificate is given to the buyer prior to the contract. If the seller fails to provide a pool compliance certificate, the seller will not be ready, willing and able to settle and accordingly, the buyer will have a right to terminate the contract. This is a termination trigger, not merely an adjustment. Agents listing properties with pools must ensure compliance certificates are obtained or that the correct notice is given pre-contract — this is not something to manage at the last minute.

The Agent’s Role in Coordinating and Facilitating the Inspection

Agents are not passive bystanders in the pre-settlement inspection process. They are active participants with practical and professional obligations that extend beyond simply providing property access.

The pre-settlement inspection can generally be arranged directly with the real estate agent or, in the absence of a real estate agent, the seller themselves. This means the coordinating responsibility falls primarily on the agent. Refusing or obstructing access without proper grounds would be a serious professional failure. The access right is contractual — the seller cannot reasonably refuse, and an agent who facilitates refusal exposes both their principal and themselves to complaint.

In practical terms, the agent’s responsibilities at this stage include:

• Confirming the inspection time with the seller (particularly where the property is still occupied)
• Ensuring the property is accessible at the agreed time
• Being available — or having a representative available — during the inspection where possible
• Responding quickly if the buyer identifies concerns, and escalating those concerns to the seller’s conveyancer without delay

Access is typically arranged through the real estate agent, who can coordinate with the seller. When a property is tenanted, this involves an additional step: the agent must provide the tenant with proper notice under the Residential Tenancies and Rooming Accommodation Act 2008 before entry. A pre-settlement inspection is not exempt from tenancy notice requirements.

Agents should also ensure that keys or access codes are confirmed and working before the scheduled inspection time. Arriving to find a padlock changed or a key that no longer fits wastes everyone’s time and can introduce tension into an already sensitive pre-settlement period.

What to Look For: The Four Core Areas of Focus

The inspection should be systematic and documented. Common issues agents need to be prepared to address fall into four categories.

Property condition and damage: Damage to the property can arise when sellers are removing their furniture or if an unforeseen event occurs while the sellers no longer occupy the property. Buyers should look not only for obvious signs of damage like a burst water pipe but also for new dents in walls and new scuff marks or scratches on the floor.

Included chattels and fixtures: A contract may provide for items in the property that were agreed to be included in the purchase, or items that were fixed to the property but had been agreed to be removed. Buyers should ensure that any items agreed to be included in the purchase are still inside the property and are in functioning order. Included chattels are considered to be part of the purchase price under the contract, so it is important they are actually working.

Agreed repairs: If the buyers and sellers had agreed that the seller would undertake repairs on the property during the course of the contract, buyers should check the repairs have been made as requested. Any repair undertakings given during contract negotiations should be verified against the completed work — and ideally supported by receipts or written confirmation.

Cleanliness and condition of the premises: While the contract usually doesn’t specify a professional clean, the property should be left in a reasonably clean and tidy condition, allowing for immediate occupancy. Sellers who leave excessive waste, rubbish, or abandoned property on the premises may be in breach of their obligations — though this is a fact-specific question in each transaction.

When There Is a Problem: The Legal Framework and Available Remedies

This is where Queensland law has a significant complexity that agents, buyers, and sellers frequently misunderstand. The remedies available when a problem is found at pre-settlement are more limited than many people expect.

Under Queensland law, rarely would the buyer be entitled to say to the seller “you breached the contract, and I will not settle until you fix it.” Similarly, the buyer is not entitled (unless the seller would agree) to a reduction in the purchase price for the damage caused. In most cases the buyer is required to make an “election.” That means the buyer either assesses the breach as serious enough to terminate the contract and does so, or proceeds to settle it and reserves the right to claim damages.

This is the critical legal tension. It is not a binary situation where the buyer can simply hold up settlement and demand repairs. The practical resolution paths are:

The seller may reduce the purchase price for items that were to be included in the contract but have been removed from the property; rectify any damages to the property before settlement; organise the removal of waste in the property before settlement; pay the buyer by way of a settlement adjustment in their favour so they may arrange for rectification of damages or removal of waste after settlement; or withhold some of the settlement monies to account for the rectification of damages until the seller has attended to those matters.

All of these resolutions require the cooperation of both parties and their conveyancers — and they require prompt communication. Parties should aim to reach an agreement before settlement, and therefore buyers must advise of defects before settlement is due to occur. This will allow the buyer’s conveyancer time to negotiate with the seller’s solicitor to rectify the issues. Once settlement is effected, the property will be the buyer’s responsibility and any issues not already notified to the seller will no longer be the seller’s liability.

The Termination Question

Termination is not a straightforward remedy for pre-settlement defects. Not every breach of contract by the seller entitles the buyer to terminate the contract. The law says that the right to termination arises only in the case of very serious breaches, which effectively undermines the benefit that each party expected from the contract. A wall scratch from furniture moving is unlikely to meet this threshold. Significant structural damage, or destruction of a major included item, might.

It is crucial not to simply refuse to settle without proper legal advice. Refusing settlement without valid grounds could put you in breach of contract. Agents who find themselves advising a distressed buyer at 8am on settlement day must be careful not to stray into legal advice — their role is to communicate the situation clearly to all conveyancers and let the legal process run.

The Property Law Act 1974 supports the buyer’s position in these situations, but the practical application depends on the nature and severity of the issue. For unresolved disputes post-settlement, the Queensland Civil and Administrative Tribunal (QCAT) handles such matters.

Documenting the Inspection: Protecting All Parties

Thorough documentation during a pre-settlement inspection protects everyone — buyer, seller, and agent. Photos and videos taken during the initial inspection and the pre-settlement inspection can serve as evidence in case of disputes. Agents should encourage buyers to photograph the property systematically during the walkthrough, and should consider taking their own contemporaneous notes about the state of access and the property’s general condition.

Any issues identified should be communicated in writing immediately. Verbal assurances that something will be fixed before settlement hold little weight if not confirmed in writing between solicitors. Agents should resist the urge to act as intermediaries negotiating the substance of a repair or adjustment — that role belongs to the conveyancers and solicitors. The agent’s role is to communicate, facilitate, and document.

Where a buyer brings an independent building inspector to the pre-settlement inspection, the agent should accommodate this professionally. There is no contractual basis to refuse access to a consultant accompanying the buyer.

Pre-Settlement Inspections for Units and Properties in Community Title Schemes

Units and lots within community title schemes present additional complexity. Buyers of apartments and units have the same pre-settlement inspection rights as house buyers, but there are additional considerations. Apartment inspections should cover not only the interior of the unit but also common property areas that affect the unit, such as hallways, car parks, storage areas, and building amenities.

For body corporate properties, agents should confirm which inclusions are lot-specific versus common property prior to the inspection so that any disputes about fixtures are framed correctly. A parking space that appears in the contract schedule is a different legal question from a communal lobby feature.

New residential construction has its own overlay. For new residential construction, the Queensland Building and Construction Commission administers Home Warranty Insurance covering defective workmanship for 12 months from practical completion and structural defects for up to six years and six months. Pre-settlement documentation of defects on new Queensland builds should be detailed enough to support a QBCC warranty claim.

The New Seller Disclosure Regime and Its Interaction with Pre-Settlement

From 1 August 2025, Queensland’s new seller disclosure regime under the Property Law Act 2023 introduced a formal pre-contract disclosure framework. These contracts work alongside Queensland’s new seller disclosure regime under the Property Law Act 2023. Form 2 Seller Disclosure Statement and prescribed certificates must be given to the buyer before they sign the contract. If disclosure is late, incomplete, or inaccurate, the buyer may have a statutory right to terminate the contract, even up until settlement.

This is significant for pre-settlement inspections because a buyer who discovers at pre-settlement that something disclosed was materially incorrect — or that something was not disclosed at all — may have a termination right arising from the disclosure regime, separate from any breach of contract analysis. Agents need to understand that the disclosure statement creates an ongoing standard of accuracy through to settlement.

What This Means for Queensland Agents

Pre-settlement inspection obligations sit at the intersection of contract law, professional practice, and client management. Every agent involved in a residential sale in Queensland should operate from a clear framework.

Coordinate early and confirm access. Do not leave the pre-settlement inspection to chance. Confirm the timing with your seller client well in advance, especially where the property is occupied, tenanted, or located in a strata building. Ensure keys or access codes are current and functioning.

Understand the one-inspection limit. As buyers can only conduct one pre-settlement inspection of the property, it is important that buyers be mindful of when they should arrange their pre-settlement inspection. This is information you should communicate at the time of the inspection booking, not after.

Advise seller clients about their obligations before move-out. The most common pre-settlement disputes involve damage caused during the sellers’ removal of furniture and personal effects. Brief your seller clients explicitly: they must use the property reasonably, they cannot remove contractual inclusions, and they remain liable for damage they cause. This conversation is best had early — not the day before settlement.

Respond fast when issues arise. A buyer who identifies a problem at 2pm on settlement day has very little time to exercise any rights before 4pm. As soon as buyers become aware of any new defects, they should advise their conveyancer immediately to contact the seller about the issues arising from the pre-settlement inspection. As the agent, your job is to ensure those communication channels are open and that you escalate without delay.

Stay in your lane. When a genuine dispute arises, your role is to communicate and facilitate — not to interpret the contract or advise on legal rights. That is the job of the conveyancers. A well-managed pre-settlement inspection that encounters problems, handled with clear communication and professional composure, is still a smooth settlement. One where the agent overreaches or goes quiet is where deals collapse.

The pre-settlement inspection is not administrative housekeeping. It is the final contractual checkpoint before ownership changes hands. Treating it with appropriate professional care is part of what separates competent agents from outstanding ones.