Should I Get a Building and Pest Inspection?
In Queensland, the standard contract for property transactions, has a provision for a building in pest inspection to be completed by the buyer. The usual time for this to be completed is 7 to 14 days after the contract date. In some instances, particularly at auction, these reports are provided to the buyer from the seller. Buyers often ask us whether these reports can be relied on, or whether they should commission their own report.
Inspector Reliability and Report Variability
In Queensland every building and pest inspector is independently licenced through the Queensland Building and Construction Commission (QBCC). It is possible to perform a licence check on the building and pest inspector through the QBCC website. Building inspectors have an obligation to report independently regardless of who commissioned the report. Therefore, in most instances, the report you receive from the seller can be relied on.
It should be noted however that there is no standard form for building and pest inspection reports and the information that is provided can vary between inspectors. You will find that some reports are more comprehensive than others. Therefore, there may circumstances where you would like to commission your own report, particularly if you would like to know more information about a particular defect that has already been identified.
Transparency and Buyer Considerations
The advantage for the seller in providing a report, is that the seller is demonstrating that they are providing full transparency as to any known defects in the property. The buyer can then make a decision about whether to continue with the contract without further expense to them. Additionally, the buyer may wish to take a closer inspection of these defects through their own inspection.
A standard building and pest report costs around $400.00 to $600.00. Whilst this is a considerable expense that could be wasted if the contract does not proceed to unconditional, it might also save the buyer significant costs if defects are discovered down the track that cost a lot of money to repair.
REIQ Clause 4 and Buyer Options
The standard REIQ contract, clause 4, has a provision for termination of the contract if a building and pest report is not satisfactory to the buyer. This usually means that there are significant undisclosed major defects in the building. In order to enact this clause, the buyer must provide a copy of their building and pest inspection report to the seller.
The standard clause provides for two outcomes. Either the contract can continue on foot, or the buyer can terminate the contract. However, it has become common practice for the buyer to negotiate the repair of the defects prior to settlement, or a reduction to the contract price at settlement. A seller does not have to agree to a reduction in the price. Often the seller does agree, so that the contract remains on foot. In this case, the building and pest clause is waived by the buyer.
Whist it is not mandatory to obtain a building and pest inspection when purchasing a property, it is highly recommended.
With the prices of houses only increasing, these small expenses could save you a major headache down the track and will provide you with peace of mind.
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