General information, not legal advice. A contract’s wording is a matter for the solicitor or conveyancer who prepares or reviews it. The official places to check are your state or territory’s fair trading or consumer affairs body, listed at the foot of this page.
05.1
Clause card · QueenslandQBCC and Office of Fair Trading
Make it a condition, and check it is written in
The QBCC’s advice: “You should get a building and pest inspection before you buy and make it a condition of your contract that you must be happy with the results of these inspections before you finalise the sale.”
The Office of Fair Trading lists a successful building and pest inspection among the conditions a contract might be subject to, and adds: “You must check to make sure these conditions are in the contract when you sign it, otherwise they won’t be legally binding. This is your responsibility.” If inspections cannot be arranged early, it says they can still be done before settlement day, with terms written into the contract that let you cancel the sale if the reports are poor.
05.2
Clause card · VictoriaConsumer Affairs Victoria
A private sale can be conditional; an auction, only by agreement
In a private sale, Consumer Affairs Victoria says you can negotiate with the seller to make the sale subject to conditions such as “the successful completion of a building or pest inspection”. At auction, you cannot put conditions on the contract without the seller’s agreement.
Once a report is in hand, the same body says you may be able to use it to negotiate the price and conditions in the contract with the seller, or to develop a maintenance program if you go ahead.
05.3
Clause card · Western AustraliaConsumer Protection WA
A special condition, with three things settled in it
Consumer Protection WA says property and pest inspections can be made a special condition of the contract, and that the condition should cover who pays for the inspections, who pays for any repairs or treatment, and whether you can cancel the sale if there is substantial structural damage. It recommends wording conditions precisely to avoid disputes later, and getting expert advice so they are drawn up correctly.
What you can do about a problem in the report then depends on that condition. Consumer Protection says your options are covered by the special conditions in the Offer and Acceptance contract; if it does not cover inspection report issues, you will need legal advice. Any agreement with the seller about fixing things should be in writing, including who is responsible for the treatment and repairs and when they must be finished. To end the contract under the condition, you send written notice to the seller or agent as the condition’s terms require.
An “as is” offer is the opposite case: the seller will not agree to meet special conditions of sale, such as building and pest inspections. WA also has no mandatory cooling-off period for real estate contracts, so the condition does the work that a cooling-off window might do elsewhere; cooling-off and the report has the comparison.
05.4
Clause card · South AustraliaConsumer and Business Services
Read what the standard clause actually covers
If you are buying by making an offer, the SA Government says the contract can be made subject to a satisfactory inspection report. It then adds a warning worth reading slowly: “It’s important to note that standard subject-to building inspection clauses in contracts usually only give the purchaser rights or remedies if major structural defects are found.” It suggests considering whether you want rights if minor defects are found, “as many small issues can become costly.”
At auction the order reverses. You need to arrange the building and pest inspection before auction day, and a successful bidder cannot make the contract subject to a satisfactory building inspection report.
“Major structural” is a narrow gate.
05.5
Clause card · TasmaniaConsumer, Building and Occupational Services
A standard form with few ways out
Tasmania’s consumer regulator says the Law Society of Tasmania and the Real Estate Institute of Tasmania publish a standard form contract that is used for most sales in the state. Its ‘get out’ clauses are limited, and the most common are conditions to get finance and building inspection clauses.
05.6
New South Wales and the ACT work differently
New South Wales. NSW Fair Trading’s buyer guide frames the report by its timing rather than by a contract condition: it is “usually carried out before you exchange sale contracts so you can identify problems which, if left unchecked, could prove costly to repair.” It also describes fitting an inspection into the cooling-off period after exchange.
ACT. In most ACT home sales the seller must have a building and compliance report, and for an occupied home a pest report, available for buyers to inspect at all reasonable times when an offer may be made; a class A unit, a home never occupied or sold as a dwelling, and one still to be built are among the exceptions. Access Canberra adds that a buyer may still get their own reports, at an additional cost. The ACT seller’s reports page covers both.
A condition is only as useful as the report behind it, so the inspection needs to be arranged in time. NSW Fair Trading notes that most consultants need at least 2–3 days’ notice to do a building inspection.