When purchasing a property, obtaining thorough building and pest inspection reports from licensed inspectors is essential to ensure the property's condition. If unsatisfied with the inspection results, Buyers can terminate the contract, provided the Contract has been formed subject to satisfactory B&P inspection/s.
If the Contract is subject to satisfactory B&P inspection reports on the Property, the Buyer must take all reasonable steps to obtain at least one report. They must use licensed inspectors and the reports must be in writing, otherwise they will not be able to terminate the Contract on the grounds that they are not satisfied with the B&P inspection.
In the case of the Standard Contract, the reports may relate to the land, the improvements on the land and any included chattels. The improvements will include not only the building structures on the land but also additional items such as sewage and waste water treatment facilities, hot water systems, retaining walls or revetment walls within the land as these items might be expensive to repair or replace in the future. Buyers should ensure any inspector is suitably qualified.
The Buyer must arrange for a licensed inspector/s to conduct a building and pest inspections and provide written reports.
If the Buyer is not satisfied with the results of the building and/or pest reports, they have the right to terminate the Contract (provided acting reasonably).
The Buyer doesn’t have the right to reduce the price or require the Seller to undertake any works, however the Buyer and Seller may agree to vary the terms of the contract by adjusting the price or agreeing in writing to certain steps being undertaken.
Buyers must notify the Seller in writing on or before 5pm on the inspection condition expiry date as to whether or not they are satisfied with their B&P reports and wish to terminate the Contract.
If the Buyer elects to terminate the Contract due to unsatisfactory Building and Pest reports, this must be done prior to 5pm on the due date. If the Buyer does not provide notice to the Seller by this time, the Seller will have rights to terminate the Contract at 5.01pm.
If the Buyer does not notify the Seller in writing before 5pm on the inspection date of satisfaction, waiver or dissatisfaction, the Contract continues and both parties have a right to terminate. Buyers continue having a right to give notice of satisfactory B&P or waiver but only if it is received by the Seller before they terminate.
If a Buyer does not have a report by the inspection date they can seek an extension, however, the Seller may not agree to the extension.
If a Buyer is satisfied with the report, they should give notice to the Seller that the B&P condition is satisfied.
If a Buyer terminates, the Seller is entitled to request a copy of the reports and they must be provided without delay.
A Buyer may waive the benefit of the condition so that the Contract will no longer be subject to this condition and the Buyer will be obliged to complete the Contract. The Buyer would then not have any recourse against the Seller under this condition for issues which are raised in the B&P reports.
Disclaimer: Every property transaction is different, and the information provided may not be relevant to your circumstances. By using this site you agree that the information provided is for general purposes only and does not constitute legal, financial, or professional advice.
