Pre-Purchase Building Inspections

Almost invariably,
buyers of an established residential property seek to include in their offer a
clause that protects them from unbeknownst building defects.

This is fair enough
although buyers need to be aware that the pre-purchase structural inspection
condition used by REIWA members is limited to that which is contained within
Australian Standard AS 4349-2007. The standard is designed to identify structural faults only, expressly
excluding building elements such as roof plumbing, wiring, windows, doors,
ceiling linings, tiling, plastering and a host of other items.

It is designed to
protect the buyer from buying a “lemon” whilst safeguarding the seller against
a last minute contractual failure due to minor issues such as a dodgy power
socket. Whilst buyers and sellers remain free to negotiate terms around the
condition of the building as they see fit, most modern sales agreements will
enable a buyer to void the contract only in the event the home is structurally
compromised, unsound or has a significant structural defect that the seller is
unprepared to repair.

This may mean that given
almost all residential buildings, especially the older style homes throughout
the Fremantle area have some minor failings of a maintenance nature, the REIWA
condition effectively eliminates “subject to changing your mind” provisions for
the buyer.

At the point of
contract, willing buyers are usually satisfied with such clauses and view them
as a reasonable provision that protects both parties. However, building
inspections are often very thorough and buyers can be surprised at the amount
of identified minor faults in such reports not covered by the contract.

Whilst the quality,
cost and style of building inspection services varies, in almost every case,
the conclusion is that aside from a collection of minor defects, the dwelling
is structurally sound.

After receipt of the
builder’s report, buyers often then approach the agent with a list of requests
to the seller to make repairs of a non-structural nature prior to settlement
despite the clear intent of the contractual agreement. This is a natural
response but buyers ought to have a realistic expectation of a building’s
condition and understand the contractual responsibilities of the seller when
choosing to buy an established home when using standard conditions.