Building and Pest Inspection Clauses in Your Purchase Contract
While most agents use a standard Home Purchase Contract, they will change some clauses based on the seller’s needs. Some of these home purchase contract clauses put the buyer at a distinct disadvantage – so before you put in the offer and sign the contract, keep an eye out for these potentially problematic issues.
Building and Pest Inspection Clause
Before signing your contract ensure that the building inspection clause within the contract states that the building inspection must be to the purchaser’s satisfaction. Beware of contracts that state that you can only renegotiate or pull out of a purchase should there be a structural fault. In all instances we would recommend your solicitor be provided with the contract prior to signing to check all clauses etc are in order.
14 Day Inspection Time Frame
Ensure you sign a contract that allows you 14 days to obtain a building and pest inspection. The agents prefer you to sign a contract giving you 7 or in some instances 5 days. This time frame includes the day you sign the contract and weekends.
The short time frame often forces you to use an inspection company that you would not necessarily have chosen had you have had more time in which to obtain your inspections. The short time frames do not allow you enough time to digest the information in the report. This is not a decision to be rushed.
Eliminate potential problem properties yourself
There are literally many hundreds of items your building inspector will evaluate during the course of an inspection. However by being aware of at least the following few items you may be able to eliminate some less than desirable homes before you obtain the services of a building inspector on your final choice of home.
Remember, only a professionally licensed building inspector can undertake a building inspection in accordance with your contract conditions.
- Check for large trees within a relatively close proximity of the house or building as they can be costly to remove and can contribute to wall cracking and blocked drainage etc.
- Check for obvious cracks within the external walls of the building. Some cracks within the external walls may seem insignificant, however can indicate more substantial problems.
- Check the contour of the allotment around the house. Does water flow up against the house? If there is inadequate drainage placed around the house excessive water flow can contribute to termite attraction, foundation movement and internal water penetration etc.
- Run at least two internal taps at the same time to evaluate whether there is adequate water pressure.
- Check the ceilings for obvious water stains as this can indicate broken roof tiles etc.
- Open and close some doors to see if they bind on the door jambs. This can indicate some degree of settlement.
- Ask when the last termite treatment was carried out and if the report is still available. If the treatment is older than twelve months, and no follow up inspections have been undertaken, the house may be susceptible to termite attack.
The same above-mentioned items require consideration when purchasing a unit. In addition consider the items listed below.
Are the grounds around the building well maintained and is the complex well presented? A poorly maintained building usually indicates inadequate sinking funds and could lead to a costly increase in future levies to cover repairs.
Check the Body Corporate records for previous or upcoming repairs.
Check with Body Corporate to ensure that some unit modifications can be carried out eg. some Body Corporates do not allow the installation of window awnings or air-conditioning units etc.
What to do if the contract clauses don’t fall in your favour
Insist. It’s rare that a seller will insist on contract clauses around building and pest – and often means they have something to hide. If they’re insisting on short turnaround on your building and pest inspection, you may find that you won’t have time to assess the pre-purchase inspection report (see sample here) for issues and get quotes to remedy any problems. This means you’ll be buying a property without all the information you need to determine its value. If they absolutely insist and you really do want to buy the property, book your pre-purchase inspections as soon as possible. The more time you have to interpret and understand the report, the more opportunity you have to get a reduction in the purchase price – or to take steps to get out of the contract.