Building & Pest Inspections - what are they really?

A building and pest inspection should be considered an essential part of the home buying process and in Queensland it is standard for contracts of sale to include a building and pest condition. To gain protection under the contract the inspection must be conducted by an appropriately licensed inspector.

Building & Pest inspections are designed to determine the condition of the house before committing to completion of the purchase. They assist with identifying any major issues (big or small) that will need to be remedied. Common building defects that are identified during inspections include rising damp, leaks or draining issues, cracked wall, leaking roofs and safety hazards.

It is very important to remember that building and pest inspections are visual inspections, which mean inspectors cannot cause any damage to the property or even move items of furniture during inspections. If there are areas to which they cannot gain access, these will also not be inspected.

However, it is critical to note that these clauses do not automatically give you a right to terminate or renegotiate the price.

You can only terminate a contract if your inspection reports are not satisfactory to you but you must act reasonably in doing so. Many potential purchasers don’t realise this and this is where difficulties can arise. A seller can challenge your right to terminate the contract on grounds of reasonableness particularly if the defects included in the reports are few and minor or potentially were clearly identifiable before making the offer (and therefore taken into account with the agreed price). Whether or not it is reasonable to terminate the contract will depend on a variety of factors, such as the age of the property and if the issue was obvious when the contract price was negotiated. Major structural issues or active termite infestation are examples where it would be reasonable to terminate.

Many people also don’t realise that a report from a building and pest inspector usually doesn’t cover whether all structures on the property have received the necessary building approvals from Council and additional searches will need to be done separately to ensure these approvals have been obtained.

It’s important to discuss these issues with your solicitor and have them look over your contract before signing anything.


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Changes to REIQ Contracts for Houses and Land coming in January 2022

The Real Estate Institute of Queensland (“REIQ”) and the Queensland Law Society (“QLS”) have announced that the new standard contracts for sales of houses, land and residential units will be released in late January. The changes have been introduced to resolve some issues faced by buyers and sellers when dealing with financial delays to settlement, in addition to updating a number of issues.

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