What does “Subject to building and pest inspection” means?
When you find the perfect house of your dream, you get excited to buy it on the spot. But don’t rush. Australian property market provides you the provision of the “Subject to property inspection” clause, and that is for good reasons.
A perfect-looking house could have hidden defects that only an experienced building inspector can identify. So subject to building inspection conditions is a smart decision to protect yourself from the after purchase shocks.
The “subject of building inspection” or “subject to building and pest inspection” is a condition that applies to the sale contract of the property. Subject to building inspection condition means that the sale of the property depends on the outcome of building inspection.
This clause is not just there to be part of the fine print. A property buyer needs to understand these clauses so you do not end up buying a property in a dilapidated condition or infested with pests. A building and pest clause condition should exist as a condition of the sale when you buy a home. The clause allows you to get a written report from qualified building and pest inspectors about the property. This means that the sale of the property will only be a done deal after a standard building and pest inspection has been done.
Building and pest reports can identify a number of issues about the property. The building inspectors are experts at identifying the building defects concealed under the paint and carpets. These defects range from small tap leaks to major water damage or structural weakness.
A sound and properly worded building and pest inspection clause give the buyer the right to withdraw from the contract due to an unsatisfactory report. But do not get fooled by the contract conditions, read between lines. Not all contracts give you the right to pull out of the contract. A poorly worded clause or poorly worded inspection reports can limit your right to pull out of contract.
The first condition is that building and pest inspection must be done by a licensed and professional building inspector. A building inspection done by a relative or friend who is not licensed to do the inspection is not valid to cancel the contract. Also, the property seller can request a copy of the building inspection.
Here an important point must be said. A contract’s wording plays an important role to determine whether the purchaser can be canceled or not. For example, if the condition says that the contract is subject to the condition of structural soundness, then this does not give much liberty to the purchaser to cancel the contract as all buildings are structurally sound. The contract should mention that report must be to the satisfaction of the purchaser. This gives better control to the purchaser. The key point is ‘if the report is not to buyer’s satisfaction. This allows the buyers to pull out of the contract if the pest inspection comes back with some problems.
So a properly worded “Subject to building and pest inspection” clause protects the buyers from unforeseen issues in a potential property.