Building Reports
When purchasing a new property, it can be a stressful time, you may feel tempted to include as few conditions as possible on your purchase offer to encourage the seller to accept your offer quickly and above any other bidders.
The basic rule that applies to the sale of real estate in Victoria is buyer beware.
A building inspection is an inspection of a building, inside and out, looking for any major structural faults to minor defects, maintenance issues and safety hazards. It may include cracking, rising damp, drains and gutters, sheds, retaining walls and fences, windows and roofing, or uneven footings.
A pest inspection in the same vein is an inspection of the property inside and out to determine whether there are any major pest infestations or whether there have previously been pest infestations at the property.
When you sign a contract as a purchaser it is on the basis that you are purchasing the property as it is at the time you inspect it. Generally, it is assumed that you have made your own enquiries and completed your due diligence when contemplating the property purchase.
Although a purchaser may avoid a contract on the basis of a latent title defect and any defect other than a latent title defect will be grounds for a purchaser to exit the contract. Once a purchaser has signed an unconditional contract to buy the seller is only obliged to deliver the property in the condition in which it was sold, with all defects, if any, that existed at that time.
The seller is under no obligation to improve the property or rectify defects that may be discovered by the purchaser after signing the contract. This applies even if the seller was aware of the defects at the time of the sale or indeed had caused those defects, for example, by undertaking illegal works.
The seller is not liable for defects in quality unless there has been a misrepresentation or fraud by the seller, or if the parties have agreed.
When signing a contract of sale generally there is an option to select a building and pest inspection in the schedule. By ticking these conditions the purchase becomes subject to and conditional upon a building and pest inspection within 7 or 14 days from the date of sale. If a major structural defect or major pest infestation is discovered on inspection the purchaser will then have the option to exit the contract at this time by giving the seller written notice.
A building and pest inspection in Victoria will generally cost anywhere between $600 to $1000. When considering the cost of the investment, being that the most money most people will ever invest in a single asset will be the purchase of a home, it is a small price to pay comparatively.