What the clause gives you
A building and pest condition in a standard Queensland contract gives you, the buyer, the right to have the property inspected by a licensed inspector before you're locked in. You arrange the inspection and you choose the inspector.
Under the standard REIQ terms you then have two choices. You can accept the property in the condition it's in, which satisfies the condition. Or, if the report isn't satisfactory, you can terminate the contract.
There's a third path people take, which is to go back to the seller and ask for repairs or a lower price. You're free to ask. The seller is under no obligation to negotiate, and plenty don't.
What the inspector actually looks at
A building and pest report is two inspections in one, done by qualified people, and it's more thorough than a walk-through with the agent.
The building side covers the roof inside and out, the bedrooms, bathrooms, kitchen and laundry, the exterior and footings, garaging and site services, and the building materials themselves, with defects recorded as major or minor. You'll get photographs and a list of recommended repairs.
The pest side looks for active infestation and past damage. Termites are the most common find, though cockroaches, mice and rats turn up too.
If you need more than the standard scope, there are specialised inspections for moisture using thermal imaging, for illicit drug residue, and for asbestos. Each needs its own suitably qualified inspector, so ask for them separately.
Say Marcus buys in Booval
Marcus signs on a 1960s highset in Booval with a ten-day building and pest condition. The report comes back on day seven: termite damage in one bearer under the back deck, and a shower that's leaking into the wall cavity behind it.
He has three options. He can terminate, get his deposit back and walk away with nothing owed. He can accept the house as it is and satisfy the condition, planning to fix it himself. Or he can ask the seller to repair the bearer and the shower, or knock the price down to cover it. The seller can say yes, say no, or offer something in between, and if the answer is no, Marcus is back to the first two options. What he can't do is let day ten pass without deciding.
Why it matters more than the cooling-off period
Ending a contract because the building and pest report isn't satisfactory is a valid termination. There's no penalty for it. That's different from ending a contract during the cooling-off period, which does carry a penalty.
The right doesn't last, though. Once every condition in the contract has been satisfied, the contract is unconditional, and the ability to terminate over the property's condition is gone. That's why reading the report properly before the due date matters. After it, you own whatever the report found.
Who pays
You do. The inspection is arranged by the buyer and invoiced to the buyer directly, separate from the other costs of buying like stamp duty. Prices vary, so get more than one quote.
If you don't like what you read
Terminate, proceed, or negotiate. Those are the three doors, and the third one depends on a seller who doesn't have to open it. Whichever way you go, tell your solicitor before the due date so the right notice is given in time.
Questions people ask
What if the report isn't back before the due date? Ask for an extension straight away. The seller can agree or refuse. Don't assume silence is fine, because once the date passes the condition may be treated as satisfied.
Is termite damage a reason to walk away? It can be. Whether it should be depends on the extent, the cost to repair and how you feel about it. The clause exists so that decision is yours to make with the facts in front of you.
Can the seller refuse to fix anything? Yes. The standard contract gives the seller no obligation to make repairs or reduce the price. Your protection is the right to terminate, not a right to force a repair.
Where this comes from
- The standard REIQ contract for houses and residential land in Queensland, which sets out the building and pest condition and the buyer's rights under it.
How Stanford Legal can help
We'll check the building and pest condition before you sign, diarise the due date, and talk the report through with you when it lands so you know which door you're walking through. The first conversation is free. Call 0483 980 001 or book a time online.
This article is general information for Queensland readers, current at the time of writing. It isn't legal advice for your situation. Liability limited by a scheme approved under Professional Standards Legislation.
