Building and Pest Inspections
Written by Nagisa Takaki
Before signing a contract of sale, you may consider making an offer “subject to a building and pest inspection”.
A property may have hidden issues with foundations and roofing, as well as termite infection. Also, a property may have defective drainage issues. The fee for a professional building and pest inspection report will be an additional cost, but the reports may save you a fortune, if it means you end up buying an issue i.e. you may avoid unforeseen repairs.
When is the building and pest condition due?
The building and pest condition date is a critical date. This means that the purchaser’s solicitor/conveyancer must notify the vendor’s solicitor/conveyancer by the due date whether or not the purchaser is happy with the report. The condition is usually due 14 days after the Contract Date.
Under General Condition of the latest REIV Contract of Sale, the purchaser may end the contract within 14 days from the day of sale if the purchaser obtains:
a written report from a registered building practitioner or architect, which discloses a current defect in a structure on the land and designates it as a major building defect; and
a written report from a pest control operator licensed under Victorian law, which discloses a current pest infestation on the land and designates it as a major infestation affecting the structure of a building on the land.
Who can help to get a building and pest report?
The purchaser should organise access to the property through the real estate agent.
To find a registered building practitioner, please refer to Victorian Building Authority’s web site at https://www.vba.vic.gov.au/.
When should building and pest inspection be organised?
As soon as possible! The inspector will need time to do an inspection and then prepare a report to send to the purchaser.
What is included in the report?
Building and Pest inspections are an assessment of a property’s condition that is conducted by a qualified inspector.
A qualified building and pest inspector will know what to look for and will see.
A summary of the inspection will be outlined below:
Live timber Pest activity
Timber Pest damage
Conditions Conductive to Timber Pest Activity
Evidence of fungal decay activity and/or damage
Evidence of wood borer activity and/or damages
Evidence of a previous termite management program
What happens if the purchaser terminates the contract under the building and pest conditions?
Under the general condition 21 and 22 of the latest REIV Contract of Sale, the purchaser may end the contract if there is major building defect in a structure and a major infestation affecting the structure of a building only. If a purchaser wishes to terminate the contract, they must provide their solicitor/conveyancer with a copy of the building and pest report. If the purchaser cannot produce the report to the vendor, the vendor will not accept that the termination is reasonable.
The purchaser must be aware of the differences between ‘defects’, ‘structural defects’ or ‘major structural defects’.
Where does the deposit go if the contract is terminated under the building and pest condition?
The deposit will be refunded to the purchaser.
Remember when you purchase at auction, the contract is unconditional and is not subject to any further condition, so you will need to arrange your building and pest inspection to occur before the auction date.
The information provided in this article is general advice only. Should you have any queries, please do not hesitate to contact our office.