Can You Start Renovations Before Settlement Day?

Buyers generally cannot start renovations before settlement day because the seller remains the legal owner until settlement occurs. Renovating before ownership transfers can create liability, insurance, finance, and settlement risks. Early access may allow inspections or quotes, but renovation work usually requires formal written permission and legal safeguards.

What Happens Before Settlement?

Once contracts have been signed, the property transaction enters the settlement period. During this time:

• The buyer arranges finance.
• Legal and administrative requirements are completed.
• Final property checks are conducted.
• Settlement preparations are finalised.

Although the buyer has committed to purchasing the property, legal ownership does not transfer until settlement takes place.

This distinction is extremely important when considering renovations.

Who Owns the Property Before Settlement?

Before settlement, the seller remains the legal owner of the property.

As a result, the seller generally retains control over:

• Access to the property
• Building works and alterations
• Insurance responsibilities
• Approval of any activities occurring on the property

Without legal ownership, a buyer usually has no authority to commence renovations, engage tradespeople, or make changes to the property.

Why Starting Renovations Early Can Be Risky

Some buyers assume that because contracts have been exchanged, they can begin preparing the property before settlement. However, doing so can create significant legal and financial risks.

1. Damage Liability

If renovation work causes damage to the property before settlement, disputes may arise regarding responsibility for repairs and insurance claims.

2. Settlement Delays

Unexpected issues can sometimes delay settlement. If renovations have already commenced, this may create complications if ownership has not yet transferred.

3. Finance Issues

In rare cases, finance approval may be withdrawn or settlement may fail to proceed for reasons beyond the buyer’s control.

If renovation work has already begun, the buyer could face substantial losses despite not owning the property.

4. Insurance Complications

Property insurance arrangements during the contract period can vary. Carrying out unauthorised works before settlement may affect insurance coverage and create uncertainty if damage occurs.

What Is Early Access?

In some situations, buyers and sellers may agree to provide early access to the property before settlement.

Early access arrangements can allow buyers to:

• Measure rooms
• Obtain renovation quotes
• Arrange inspections
• Meet with builders or tradespeople

However, early access does not automatically grant permission to undertake renovations.

Any early access agreement should clearly define:

• The permitted activities
• Access dates and times
• Insurance requirements
• Responsibility for damage
• Restrictions on building works

These agreements should always be documented in writing.

Can a Seller Give Permission for Renovations?

In some circumstances, a seller may agree to allow limited work before settlement.

However, this arrangement carries risks for both parties and is generally uncommon.

Where renovation work is proposed before settlement, legal advice should be obtained before any agreement is reached.

Important considerations include:

• Public liability insurance
• Building permits
• Risk allocation
• Property damage
• Delayed settlement scenarios
• Responsibility for contractors

Without appropriate documentation, disputes can arise if something goes wrong.

What About Cosmetic Changes?

Even seemingly minor improvements can create complications.

Activities such as:

• Painting
• Removing fixtures
• Installing flooring
• Demolition work
• Landscaping

May still constitute alterations to a property that the buyer does not yet own.

For this reason, buyers should avoid commencing any work unless formal permission has been obtained and appropriate legal protections are in place.

The Best Approach: Wait Until Settlement

While waiting can be frustrating, the safest approach is usually to postpone renovation work until settlement has occurred and ownership has officially transferred.

Once settlement is complete, buyers can:

• Take possession of the property
• Arrange insurance in their own name
• Commence renovation works
• Obtain any required permits
• Engage contractors with confidence

This approach significantly reduces legal and financial risk.

How a Conveyancer Can Help

If you’re considering early access or discussing pre-settlement renovations with a seller, your conveyancer can provide valuable guidance.

A conveyancer can:

• Review proposed access arrangements
• Explain legal risks
• Draft or review written agreements
• Clarify ownership rights
• Help protect your interests throughout the transaction

Seeking advice before undertaking any work can prevent costly mistakes and unexpected disputes.

Although buyers often want to get a head start on renovations, settlement day is usually the point at which renovation works should begin. Until settlement occurs, the seller remains the legal owner of the property, and undertaking work without proper authority can expose buyers to unnecessary risks.

If early access is required for inspections or planning purposes, it should be carefully documented and supported by appropriate legal advice.

Should you have more questions about conveyancing, don’t hesitate to contact Red Door Conveyancing on 03 8456 6797 or you may send us a contact form using this link.