“Subject to Building & Pest”

A standard contract in Queensland (e.g. REIQ or ADL) is often subject to a building and pest condition.

Inspection

It is the buyer’s obligation to organise the building and pest inspection with a licensed inspector and bear all of the associated costs. However, the buyer is able to elect to obtain only one of the two inspections.

The condition is generally due 14 days after the contract date, or as otherwise specified within the contract. The buyer must write to the seller by 5 pm on the due date, notifying either:

  • They are satisfied with the reports obtained; or

  • They wish to terminate the contract.

If the buyer needs more time to organise the inspections, their solicitor can request an extension of the due date with the seller’s solicitor.

Report

The buyer will be issued a report, which outlines any issues in relation to the property. It may identify minor defects (such as a leaking tap) to more serious issues (such as structural damage or pest infestation). The seller has the right to request a copy of this report from the buyer.

Exclusion of condition

The parties may agree to exclude this standard condition from the contract from the outset. However, the buyer will not have any recourse in relation to any building and pest issues that arise either during the conveyancing process or in the future.

Consequence of adverse findings

If the buyer is not satisfied with the contents of the building and pest report, they may elect to terminate the contract.Alternatively, they may negotiate a reduced purchase price with the seller or the seller may rectify the issue themselves if it is only minor.

If the building and pest condition was stated in the contract as restricted, the buyer will only have the right to terminate the contract for major structural defects, or those otherwise outlined in the condition.

Failure to satisfy condition

If the buyer fails to give notice to the seller by 5 pm on the inspection date, the seller may give notice terminating the contract on this basis.

A list of recommended inspectors are available here: List of inspectors

For Buyers, For SellersFiona Hollingworth