The Building & Pest Inspection Clause in the New REIQ Houses & Land Contract

There is a popular misconception that getting a Building and Pest Inspection on the property you're buying is mandatory.

Quite to the contrary, just because there is clause 4.1 under Terms of the REIQ Houses and Land Contract, doesn't necessarily mean that you are obliged to follow through or even take it up. However, you would be extremely foolish not to.

Building and Pest Inspection & Your Contract

Nor can you renegotiate the terms (including price) of your contract if your Building and Pest Inspection Report include negative findings.

The only thing you can do is to terminate the contract by notifying the vendor in writing by 5 pm of the Inspection Date. That is not to say that your vendor may not be amenable to making good any defects or even renegotiating the price, but your Building and Pest Inspection Report is not meant to serve as a bargaining tool, rather as information to support you in making a sound buying decision.

You can terminate a contract by the Inspection Date if your Building and Pest Inspection Reports are not satisfactory to you but you must act reasonably in doing so. And this is where trouble can begin, particularly as your seller can ask you for copies of your Reports which you must provide without delay. A disgruntled seller may challenge your right to terminate the contract on grounds of reasonableness particularly if the defects included in the Reports are few and minor.

Attempts have been made to circumvent this by modifying Building and Pest Inspection clause to allow the buyer to terminate only if the defects found upon inspection are structural, or to enable the seller first option to make good any defects before the buyer can terminate.

That's why you shouldn't assume that the standard clause applies. It's really important that you have your solicitor check through your contract before you sign anything.


You can contact us for more information or alternatively contact ABIS for a thorough building and pest inspection report.

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