What If the Seller's Repairs Aren't Done by Settlement

If the seller agreed to complete repairs or works and they are not done by settlement day, do not settle without a written plan. In Victoria, buyers can inspect during the week before settlement, and the seller must generally hand over the property in the same condition as when it was sold, but promised works need clear contract wording, a price adjustment, a delayed settlement, or a separate deed that survives settlement. Since the September 2025 LIV/REIV contract update, buyers should not assume an old $5,000 hold back mechanism is available for minor damage, so get your conveyancer involved before the money changes hands.

What does it mean when the seller's repairs aren't done by settlement?

It means the seller promised to fix, finish or replace something before handover, and the job is still incomplete when you're about to take the keys. It might be a leaking roof, a dead hot water service, a cracked driveway, an unsafe deck, a broken boundary fence, or a list of finishing items in a near new apartment.

This usually shows up at the final inspection. You walk through with your phone out, expecting the place to be ready, and spot half finished plaster, missing splashback tiles, paint touch ups that never happened, or a tradie who clearly never arrived.

The mistake is treating this as a small favour the seller can sort out later. Before settlement, the seller wants the balance of the price. After settlement, you may be chasing someone who has already moved, been paid, and lost interest.

Can I settle and trust the seller to finish repairs later?

You can, but it is risky unless the promise is locked into a document that survives settlement. A casual assurance from the seller, agent or property manager is not enough when the work has real cost attached.

The legal problem is merger. In plain English, many contract promises are treated as complete once the land is transferred at settlement. Some promises can survive, but they need to be drafted that way. A text message saying 'we'll get it done next week' is a weak foundation if the seller later goes quiet.

We've seen this come up when a seller agreed to finish small renovation items before settlement, then expected the buyer to accept a vague post settlement promise because 'the tradie is booked'. That is the exact moment to pause and get proper written protection.

Doesn't the Victorian contract make the seller fix it?

The standard position helps with property condition, but it may not fully protect you for unfinished agreed works. The seller is generally expected to hand over the property in the same condition as when it was sold, allowing for fair wear and tear.

That is why risk of loss or damage before settlement matters. If a storm breaks a window, a ceiling leak appears, or an included appliance stops working between sale and settlement, your conveyancer can raise that with the seller's side. That is different from a seller promising, as part of the deal, to finish a renovation item by a certain date.

The updated LIV/REIV contract also means buyers should not assume they can simply withhold money at settlement. The former LIV contract included a mechanism to withhold up to $5,000 of the sale price for minor property damage between sale and settlement, but that mechanism has been removed from the updated contract. Your conveyancer needs to check the contract version and any special conditions before you decide what to do.

What should you do when repairs aren't finished before settlement?

The safest path is to document the issue, tell your conveyancer straight away, and negotiate a clear written outcome before settlement. Do not rely on a phone call with the agent at the front gate.

A sensible first response looks like this:

Take clear photos and video during the inspection.
Compare the issue against the contract, inclusions and any written repair promise.
Send the evidence to your conveyancer the same day.
Ask whether settlement can proceed safely, and on what terms.
Get a repair quote if time allows.
Do not agree to settle 'as is' unless you understand the risk.

Timing is tight in settlement week, especially when a lender, removalists and keys are all lined up. Even so, a rushed decision can cost more than a delayed call to your conveyancer.

What are your options if the seller's repairs are not finished?

Your main options are a short agreed delay, a price credit, money held in trust, or a deed that survives settlement. The right answer depends on the repair cost, how urgent the work is, and how cooperative the seller is.

A short delay can work where the repairs are nearly complete. For example, if a roof plumber is booked for Tuesday and settlement is due Wednesday, both sides may agree to push settlement back a few days. Do not refuse to settle without advice, because you may be exposed to penalty interest if the contract does not give you a clear right to delay.

A price reduction or agreed settlement adjustment can be cleaner when you would rather organise the repairs yourself. The seller gives a credit, you settle, and you choose the tradie after handover. Make sure the amount reflects the real cost of the work, not a token discount.

A retention special condition is usually negotiated before you sign. It lets part of the price sit in trust until agreed works are completed and signed off. This is especially useful where the repair issue is known before auction or before a private sale contract is signed.

What is a post settlement works deed?

A post settlement works deed is a separate written agreement where the seller promises to finish defined works after settlement, while an agreed sum is held in trust until the work is complete. It is used when both sides still want settlement to happen on time, but the repairs cannot realistically be finished before then.

The deed matters because it is designed to survive settlement. It should say the seller's obligations do not merge into the transfer, which helps stop the promise from disappearing when ownership changes.

A good works deed usually covers:

the exact scope of work
a firm deadline
the amount held back
who holds the money, usually a solicitor or conveyancer's trust account
what proves completion, such as a licensed tradesperson's invoice, certificate or building inspector sign off
access for the seller's contractors after settlement
what happens if the work is defective or late
a step in right, allowing the buyer to use the retained money to finish the job if the seller does not

The retained amount should cover the likely repair cost, with a buffer. If the hold back is too small, the seller may decide it is cheaper to walk away. In our practice, the smoother matters are usually the ones where the retained amount is high enough to make finishing the job the obvious choice.

Where do unfinished seller repairs come up in Melbourne?

We see this across Melbourne, from inner north townhouses to bayside units and growth corridor house and land packages. It is especially common where sellers are juggling builders, moving dates and settlement pressure.

Common examples include off the plan apartments with a defects list, near new townhouses with doors or appliances not finished, older homes where the seller promised roof or fence repairs, storm damage after a rough Melbourne winter, unfinished landscaping, and pool fence items raised just before handover.

The pattern is usually the same. The repair sounds simple when everyone is keen to sign, then becomes stressful when settlement is two days away. The solution is not panic. It is written terms, enough money held back, and a clear trigger for release.

Frequently asked questions

What happens if the seller doesn't finish agreed repairs before settlement?

If the seller does not finish agreed repairs before settlement, contact your conveyancer before settling. Your options may include a short agreed delay, a price reduction, a settlement adjustment, a retention condition, or a post settlement works deed. Settling without written protection can leave you chasing the seller after your bargaining power has dropped.

Can I refuse to settle if the seller's repairs aren't done?

You should not refuse to settle without legal advice. If the contract does not clearly let you delay, you may be treated as being in default and may have to pay penalty interest or other costs. A safer path is usually to agree a short extension, negotiate a credit, or settle with money held in trust under a properly drafted deed.

What is a post settlement works deed?

A post settlement works deed is a separate written agreement that requires the seller to finish defined repairs after settlement. It usually keeps an agreed sum in a conveyancer's or solicitor's trust account until the works are complete and signed off. It should be drafted to survive settlement so the seller's promise does not disappear when the property transfers.

Can I hold back money at settlement until the works are finished?

You cannot assume you have an automatic right to hold back money at settlement. Since the September 2025 LIV/REIV contract update, the former $5,000 withholding mechanism for minor property damage has been removed from the updated contract. To hold money back safely, you usually need a retention special condition agreed before signing, or a post settlement works deed signed around settlement.

Does a post settlement works deed attract stamp duty?

A post settlement works deed that only deals with finishing repairs should not itself transfer land. Land transfer duty is still paid on the purchase in the usual way. The deed should be drafted carefully so it stays focused on the works, rather than creating confusion about the purchase price.

Who holds the money in a post settlement works deed?

An independent stakeholder usually holds the retained money in a trust account. In a conveyancing matter, that is commonly a conveyancer or solicitor. The money is released only when the deed's conditions are met, or used to complete the work if the seller defaults and the deed allows it.

Should I just settle and sue the seller later?

Settling first and suing later is usually the least attractive option for smaller repair disputes. Once settlement has happened, merger and practical enforcement costs can make the seller's promise much harder to chase. It is usually cheaper and calmer to sort out a deed, adjustment or agreed delay before settlement day.

About the Pearson Chambers Conveyancing team

Pearson Chambers Conveyancing is a Melbourne focused conveyancing team helping buyers, sellers and first home buyers across Victoria. We review contracts of sale, Section 32 vendor statements and special conditions every day, with a focus on spotting settlement risks before they become expensive problems. Unfinished seller repairs are exactly the kind of issue our team helps clients manage before handing over the balance of the purchase price.

Sources we consulted

Talk to us before settlement day

If your final inspection has turned up unfinished repairs, or the seller is asking you to settle now and trust them later, speak to Pearson Chambers Conveyancing before settlement. We can review your contract, explain your options in plain English, and help prepare a price adjustment, retention wording or post settlement works deed where needed.

Email contact@pearsonchambers.com.au. We offer a complimentary Section 32 contract review for Melbourne buyers, so you can understand the contract before you commit.

General information only, current as at the date of publication. Victorian conveyancing rules and legislation change frequently. Please contact the Pearson Chambers Conveyancing team for advice on your specific contract.