Subject to Building & Pest Inspections

Whether you are buying or selling a property, most contracts entered into these days will be subject to a building and pest inspection.  The standard contract provides that if a buyer is not satisfied with the results of their building or pest inspection they may terminate the contract (provided they are acting reasonably).  This requirement that a buyer must act reasonably is somewhat arbitrary, in that it requires the courts to apply what’s termed “the reasonable person” test.  Basically this means you have to consider whether a reasonable person would terminate the contract on the strength of the building and pest report you have obtained.


Whilst the buyers only right is to terminate, often the buyer attempts to use this right as a bargaining chip to gain leverage against the seller to negotiate a price reduction or for the seller to carry out some repairs.
In our view, regardless of whether you are the buyer or seller, the preferred option for both parties is a price reduction.  Everyone knows where they stand with a price reduction.  If on the other hand the buyer and the seller agree that the seller should carry out some repairs prior to settlement, often disputes arise between the buyer and seller (sometimes on the day of settlement) as to whether the work has been performed satisfactorily. Often these disputes can lead to delays, additional expense and sometimes contracts can even fall over (even at the point where the buyer has everything including the grand piano in a removalist van parked outside the property waiting to unload).


As the building and pest inspection is an essential part of the due diligence process we can advise you so that you are prepared.

CALL  ☎ 07 3844 0188   EMAIL 📩