How do you know the property you are buying is free from defects, especially those defects that are hidden from the naked eye?
The answer is simple.
Ensure that your Contract is subject to a building and pest condition.
In this article, we discuss the building and pest condition and how you can use a building and pest report to save you money.
What Are Building and Pest Inspection Reports?
If your contract is subject to a building and pest condition, it means that the sale is subject to a satisfactory building and pest report.
You must get a licensed building and pest inspector inspect the property before the building and pest condition date.
Building and pest reports are usually detailed – your inspector will thoroughly inspect the property, both internal and external and provide you with a report.
If the building and pest report identifies serious defects with the property or presence of pests such as terminates, you would be entitled to terminate your contract.
What Are the Advantages of Getting a Building and Pest Inspection?
1. Be Aware of the Property’s True Condition
You will have peace of mind that an expert has inspected your property for any defects both patent and latent.
Building inspectors do make use of technology that can identify potential issues hidden behind walls. For example, an abnormal moisture reading is an indication that they may be a water leak behind a wall.
Your inspector will also inspect areas of the property that you would not normally. For example, inspectors usually inspect the roof void (ceiling) and the roof.
If the building and pest report does not reveal any issues with the property – congratulations – you’re not buying yourself a lemon!
Sometimes, building and pest reports can reveal some minor problems that may need to be monitored. Although you will not generally be entitled to terminate for minor issues, you will be aware of any minor issues that you wouldn’t have if you didn’t get a building and pest report.
2. You can Terminate
A building and pest condition serves as a safety net.
If the building and pest report identifies serious defects with the property or presence of pests such as terminates, you would be entitled to terminate your contract.
3. Avoid Financial Stress
Imagine buying your dream home and then later finding out that it has major defects?
If you bought the home without the benefit of a building and pest condition, you’re stuck with it.
Sorry.
Chances are you will have to spend more of your hard earn cash to get the defects rectified.
How Can Building & Pest Reports Save You Money?
Although building and pest reports do come at a cost, they can actually save you money.
If you are not entirely satisfied with the building and pest report, you may be able to negotiate a reduction on the purchase price.
Remember, a seller is not obliged to enter into negotiations – they can simply refuse to do so. If this happens, you will either have to satisfy the building and pest condition or exercise your right to terminate on or before the building and pest condition date.
At One80 Conveyancing we have successfully negotiating reductions in the purchase price for our clients where they were not entirely satisfied with the building and pest report.
A Recent Case Study
The building and pest report revealed a number of defects with the property, including possible water damage to some walls due to a high moisture reading.
We advised our client that they had two options:
- Exercise their right to terminate the contract; or
- Negotiate a reduction in the purchase price.
Our client’s preference was to first negotiate a reduction.
We asked our client to obtain an estimate to rectify the defects.
Armed with the estimate, we began our negotiations.
The result was that we successfully negotiated a reduction of $20,000.00 for our client.
The best part of it all is that the client did not pay us an extra cent! Our fixed professional fees covers negotiations on account of building and pest inspections.
Final Thoughts
For peace of mind, always ensure that your Contract is subject to a building and pest condition.
If you’re not satisfied with the building and pest report, you can exercise your right to terminate the contract without penalty.
Alternatively, you may negotiate a reduction in the purchase price.
If you want to learn more about buying a property in Queensland, please do reach out to us at One80 Conveyancing.
We help buyers get their dream homes trouble free with the One80 App™ and the One80 Prime System™.
DISCLAIMER: This article is provided for general information purposes only. Its content is current at the date of preparation. Changes in circumstances or policy or legislation after the time of preparation may impact the accuracy of the information provided. It is not legal advice and is not tailored to meet your individual needs. You should obtain specialist advice from a qualified professional based on your specific circumstances before taking any action concerning the matters discussed in this guide. One80 Conveyancing Pty Ltd will not accept liability for any reliance on this article, including but not limited to, the accuracy, currency or completeness of any information or links.
