In Queensland the standard contracts of sale, being either the REIQ Contract, or the ADLForms Contract, include a standard building and pest condition. What this means is that a contract for the purchase of property will be subject to the buyer undertaking a building and pest inspection of the property and being satisfied with the report they receive following the inspection.
The contract does not have to be subject to this standard condition and if left blank the contract will not be condition upon it and the buyer will have no recourse for any building and pest issues later found in the property.
In most cases though, a standard contract of sale for the purchase of property, whether it is a house, unit, or apartment, will be subject to the building and pest condition. The buyer must undertake the inspection of the property within the timeframe detailed on the contract, which is usually seven or 14 days. It is the buyer’s responsibility to arrange for the property to be inspected and they must also bear the cost of this inspection. Following the inspection, they will receive a report from the inspector that will identify any issues with the property. They must instruct their conveyancing solicitor to advise the seller’s solicitor of the outcome of this inspection by the condition due date on the contract.
So what happens if you’re buying a property and are not satisfied with the building and pest inspection report?
If you’re purchasing a property on the Gold Coast, or in Brisbane and the report you receive from the inspector following your building and pest inspection comes back highlighting issues with the property you do have a couple of options.
First of all, if the issues identified with the property are serious enough to make you reconsider its purchase, you can elect to terminate the contract under this condition. In order to terminate the contract the building and pest inspection must have identified a serious issue with the property.
If you report highlights issues with the property, but you still wish to proceed with its purchase, you can enter into negotiations with the seller to either rectify the issues identified, or to reduce the settlement price of the property by an amount equal to the cost of the work required to rectify the issues identified in the report.
The seller is not obliged to negotiate with you in regards to the issues raised, however in a lot of cases they are willing to make some concessions in order to ensure the contract is not terminated by you as the buyer under this condition.
If the seller is not willing to negotiate as above, you can still terminate the contract, or alternatively you can elect to waive the building and pest condition and continue with the purchase of the property if you are comfortable, knowing that the issues will still be present when you take possession of the property.