Homebuyers Guide: Why you need a Building and Pest Inspection Clause?
With the property market boom of the past few years and the increase in competition between Buyers, the practice of removing the Building and Pest Inspection clause from the REIQ contract has become increasingly common.
If you are buying a home in Queensland it is not considered mandatory to include a Building and Pest Inspection clause to your contract.
You may have been told if you are intending to knock the property down and rebuild it may be practical to waive the Building and Pest rights as the risk for future complications could be considered low.
Additionally if the Buyer has arranged the Building and Pest Inspection prior to the sale they may consider it to be unnecessary and encourage for you to remove the clause from the contract.
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Why do you need a Building and Pest Inspection when buying a Home in Queensland?
In both instances the removal of the clause may still pose significant risk for a Buyer due to unforeseen problems and consequences after the property conveyance has settled.
If the Seller’s Building and Pest report is not able to be relied upon or is defective the Buyer may suffer financial damages and loss without the future ability to seek compensation from either the Inspector or the Seller.
Recently in Brisbane new Homebuyers purchased a property with the intention to renovate but without the knowledge that there was a termite infection throughout the walls of the home. As a result the damage to the home cost upwards of $600,000 AUD to repair. After the discovery the Homebuyers had only the option to demolish the property and were left with a plot of land and no house. In this case they had signed a contract with the Seller that stipulated the Building and Pest Inspection clause be removed from the contract. The Seller had insisted that the competition between other potential Buyers who were willing to pay more meant that they could only successfully sign a contract with this stipulation waiving their Building and Pest rights.
Conveyancing in Queensland can often be a straight forward process however without a Conveyancing Lawyer to guide you through the in’s and out’s of your contract you are at risk of any complications that can and do arise after signing. The financial and emotional consequences can be monumental.
River City Conveyancing has over 30+ years experience with helping Brisbane homebuyers successfully purchase and sell their property or land without the stress or financial headache.
Conveyancing Tips for Homebuyers
To ensure your financial interests are protected and you can happily move into or renovate your home after purchase and settlement we recommend the following when it comes to the Building and Pest Inspection Clause:
- Before you sign your contract discuss with your Conveyancing Solicitors if the contract includes a sufficient clause for building and pest
- If the contract does not have a Building and Pest Inspection your Conveyancing Solicitors will draft a clause before signing to ensure your interests are protected
- if the Buyer is pressuring you to remove the clause due to competition talk with your solicitor and your financial advisors about the potential financial damages you may be subject to if you sign the contract with protecting your rights to future compensation
- organise your Building and Pest Inspection as soon as possible after you have signed your contract so that you are aware of any potential issues with the property and can address these in writing with the Sellers before the date of Building and Pest Inspection approval arrives.
- With the help of a Building and Pest report and your Conveyancing Lawyer you may be able to negotiate the terms of the contract or the purchase price with the Seller. This is essential to be aware of any problems before you waive your rights
If you would like to organise an additional inspection of the property before you settle your conveyance and pick up the keys to your new home, it must be negotiated with the Seller before the day of settlement. You can arrange to visit the property to check it is in the same condition as when you signed the contract.
In the case where there are special conditions added to the contract that may have included the completion of necessary repairs by the Seller or the inclusion of furniture and other items this pre-settlement inspection is essential. It is always advisable to talk with your Conveyancer about the correct process and legal guidelines to be sure your move-in day is a happy one!