Buying a new property? What you need to know about building and pest inspections

What you need to know about building and pest inspections

A Building and Pest condition allows purchasers of property to have a licensed inspector attend the property and perform inspections for the purposes of providing a Building and Pest Report. This is usually a comprehensive report which will identify hidden issues with any property such as, internal leaks, termite infestation, structural damage, faulty roofs, and so forth.

In the standard REIQ contract endorsed by the Queensland Law Society, there will be a section labeled Building and Pest. If the inspection date is not completed in this section, then the contract is not subject to the standard Building and Pest condition. If you haven’t signed the contract when we first see you, we would often advise that it is in your best interests to ensure that your contract is subject to the standard Building and Pest condition.

To include a Building and Pest condition into your contract you will need to complete the inspection date on the contract. This can be written as “14 days from the date of the contract” or “14 days from the date of the initial deposit” and so on.

In most cases, we suggest a period no shorter than 14 days to allow time to appoint an inspector and for you to consider the report. However, we have also seen contracts which have a period anywhere between 7 to 21 days.

What if I don’t get the report by the specified date?

In the event you are unable to obtain a report within the date stipulated, you are always at liberty to request an extension to the Building and Pest Condition. This is a common process. The usual extension request is for a period of 7 to 10 days. However, since this is a request, the Seller would have to agree with this request, and there is no guarantee they will.

In this instance, you will be required to either terminate the contract or waive the condition by 5.00 pm on the stipulated date. If you elect to do neither by that time, the Seller then has a right to terminate the contract if they wish to do so. 

What are my options once I receive my Building and Pest report?

If your Building and Pest report returns without a fault or you are satisfied with the results of the report, you can instruct us to satisfy the Building and Pest Condition. On the other hand, if the report returns with faults or issues you are concerned about, you are able to terminate the contract and have the deposit monies paid refunded to you.

It is important to note that if you wish to terminate the contract under the Building and Pest section, you will have to act reasonably. This can depend on multiple factors; for example the age of the property and how obvious the defect was. A Buyer would most likely not be acting reasonably if they chose to terminate the contract due to a small cracked tile in the kitchen.

How Hall Payne can save you money on your Building and Pest condition

Using the example above, if you were unable to terminate the contract due to the small cracked title in the kitchen, we are able to ask the Sellers to either fix the cracked title or request a price reduction on your behalf. As always, we will discuss your options with you prior to the condition date.

In this situation, we might be able to suggest that we negotiate a price reduction of between $800 to $1,000. However, if the report is uncertain about the extent of the damage, it would be best for you to request the Seller fix the issues prior to settlement.

We recently assisted a client to obtain a $5,000 reduction in the purchase price for several issues outlined in the Building and Pest report, which our client could fix himself. The risk in asking for a price reduction lies with the fact that if it actually costs more to repair it, you will end up being out of pocket.  

4 tips for Building and Pest inspections

  1. Arrange for the inspections to be performed early so that there is time to negotiate any issues the report might bring up.
  2. Try your best to attend the inspection so that you can obtain more information regarding the potential issues outlined in the report.
  3. Be realistic with the issues found in the report; considering the age of the building and the purchase price.
  4. Enter into discussions with us so that we can choose the best strategy for obtaining your desired outcome.  

  This article relates to Australian law; either at a State or Federal level.

The information contained on this site is for general guidance only. No person should act or refrain from acting on the basis of such information. Appropriate professional advice should be sought based upon your particular circumstances. For further information, please do not hesitate to contact Hall Payne Lawyers.


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Get in touch with today's blog writer:
Gary Su

Solicitor in Family Law

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