In this we discuss our TOP TIPS, plus things to watch out for when it comes to Buidling & Pest, such as using licensed inspectors, acting reasonably, etc....
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Hi everybody - George Sourris, Empire Legal.
Today's topic: Building & Pest.
We discuss things to watch out for when it comes to Buidling & Pest, such as using licensed inspectors, acting reasonably, etc....
The Building & Pest clause. What is it? It's there to protect a buyer to make sure that the property they are looking to buy is structurally sound.
Let's start with timeframes. In the relavent section on page 3 of the REIQ contract, you put in a timeframe in for Building & Pest. Traditionally we'll see 7 days or 14 days. This can be any length of time, and is negotiated between the parties.
Alright guys. Now a couple of quick things. You've got to "act reasonably". So what does that mean? It means if you get a report back and it says that you've got one leaky tap or one broken light bulb, you can't terminate the contract cause you're not acting reasonably.
The test is that you never would've entered into the contract and bought the property if you knew about these things. So we're talking major problems, structural concerns, water leaking, termites, etc. If you need help with picking an inspector, we can refer people to you that can assist.
Now, you must use a licensed inspector. This is not negotiable. It can't be your handy uncle, builder mate, or anybody like that. It has to be a qualified building and pest inspector that is registered and licensed to carry out the works for the purposes of inspections in Queensland.
Below is an extract from an REIQ Contract (Standard Term 4) that is the exact wording for the Building & Pest clause:
Ok, moving along. When you get your reports back, if you're okay with it, you can satisfy the clause and move forward. If you're not happy with it, you've got three options:
Option 1 - you can terminate the contract, you'll get your deposit back and the contract is at an end.
Option 2 - you can ask for the Vendor to fix items, so repair things before settlement. Please note the vendor does not have to agree, and can counter-offer/negotiate.
Option 3 - you can ask for a price reduction. Please note the vendor does not have to agree, and can counter-offer/negotiate.
We guide you through this process, and work with the real estate agent to get you a result, regardless of whether we act for the purchaser or the vendor in the transaction.
Now if the deadline passes building & pest, so we're talking 5:00pm on the due date, the contract remains on foot - the only difference is the seller now has a right to terminate. So if you haven't satisfied it or you're still negotiating and it hasn't finalised, the seller can terminate and your deposit money's returned to you and the contract is at an end.
Alright, now last thing - if you choose to terminate on building & pest, you are obliged to provide a copy of the report promptly to the vendor. So, you want to make sure you've got that handy...from thelicensed inspector you engaged!
Thanks guys. See you on the next one.
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Note: all information is general in nature and as each matter is unique please contact our office for tailored advices: the above does not constitute legal advice.