The standard contract in Western Australia doesn’t give a buyer any right to move in before settlement, so early possession happens only if the seller agrees. If they do, the buyer will take on the outgoings, insurance and the risk from the day you move in, while the seller keeps the title until settlement.
Buyers ask for prior possession when removalists are booked or when a sale and a purchase don’t line up, leaving them nowhere to live in between. Under the standard form contract, the seller is not obliged to allow prior possession and the buyer is not entitled to demand it.
If the parties do agree, the process is usually simple. Most real estate agents have a standard form early possession agreement to formalise the arrangements. We recommend you take advice before you sign one.
What should the buyer consider?
From the date of possession you are responsible for the outgoings, meaning shire rates, water rates and any strata levies. You must not alter the property before settlement and you have to keep it in good repair.
You also have to insure the property from the possession date. If something happens to it, you are still obliged to complete the purchase. If the agreement provides for rent, you pay that to the seller up to the settlement date.
What should the seller consider?
Legal ownership does not pass to the buyer until settlement is complete. You do not receive the proceeds of sale until then either. If a dispute or a further delay arises, it can be difficult to remove a buyer who is already living there.
Ask the buyer to pay rent, or, at a minimum, ask them to waive any claim against you for penalty interest arising from a delay on your part.
Frequently asked questions
Can the seller refuse to let me move in early?
Yes. The standard form contract gives a buyer no right to possession before settlement, so it’s entirely the seller’s decision.
Who insures the property once I have moved in?
You do, from the possession date. That’s a change from the ordinary position, so tell your insurer the date you are taking possession rather than the settlement date.
What happens if settlement is then delayed?
You stay in the property without owning it and the seller has not received the purchase price. That’s why an early possession agreement should say what happens if the settlement is delayed, rather than leaving it to be argued about later.
Talk to us before you sign an early possession agreement
We act for buyers and sellers on settlements across Perth and Western Australia, including reviewing an early possession agreement before you commit to it.
Call the settlements team on (08) 9220 4430 or download an itemised quote for your own transaction.
Related: I’ve sold my house. When do I move out?
This article is general information and not legal advice. Every property transaction turns on its own facts.
