The Law Handbook 2024

554 Section 6: Houses, communities and the road vendor or their estate agent may give the buyer a right to compensation. There are two types of pre-purchase inspections: 1 A building inspection involves a builder examining the building, inside and out, and noting any issues from major structural faults to minor defects, maintenance issues and safety hazards. Outside, a building inspector will look for cracking and rising damp, and will examine drains, gutters, sheds, retaining walls, fences, windows and roofing. Inside, a building inspector will look for cracks in the walls, uneven or springy floorboards, leaky ceilings and the quality of the finishes and fittings. Some inspectors will also investigate roof spaces (to check the framing and insulation) and under the floor, but these areas are often excluded. 2 A pest inspection looks for evidence of timber pests (e.g. termites). There are two ways buyers can do a building/pest pre-purchase inspection: 1 If the property is not being sold at an auction, buyers can make an offer subject to a satisfactory inspection . The special condition is added to the contract and the buyer is given a set time frame to organise the inspection. If the inspection identifies ‘major structural defects’ (which is the normal wording of a building clause but can be varied), they can terminate the contract and get their deposit back. Another option is to add a condition to the contract that allows a buyer to terminate the contract if an inspection is not to their satisfaction or reveals defects that require work above a certain value to fix. Vendors will usually only accept an offer made subject to an inspection that reveals a major building defect or a major pest infestation. This is a higher threshold than a report needing to be to the buyer’s satisfaction. If this is the case, a buyer will only be able to terminate the contract and get their deposit back if the inspection reveals these major issues. 2 If the property is being sold at an auction, your only option is to get the inspections done before the auction . Buyers can employ a licensed building inspector or an architect to conduct a building inspection – and if necessary, a licensed pest control operator – to ensure the property is sound before making an offer. The professional fee for a building and pest inspection of an average-sized house is about $500–$700. Sometimes, a vendor will agree to negotiate a reduction of the contract price as a result of defects being identified in the building and/or pest inspections, but they are not obligated to do this. What are chattels? Chattels or goods are movable items that are not fixed to the land (e.g. a non-integrated dishwasher, washing machine, non-affixed garden shed, a garden statue, television antenna, light fittings, a swimming pool pump and filter, and floor rugs). Unless specified and included in the contract of sale, the vendor is entitled to remove chattels. If a buyer wants to purchase these movable items, they should be included in the chattels or goods clause in the contract of sale. If a vendor has a particular item they want to leave with the property, or the buyer has a particular item they want included in the sale, it is important that these items are listed in the ‘Goods sold with the land’ section of the contract. Vendor’s statement The vendor must give the buyer a vendor’s statement (also called a ‘section 32 statement’) before the buyer makes an offer on the property. The vendor’s statement is a key document in the sale of a property; the contract is void without it. The vendor’s statement contains information about the land. It does not contain information about the quality and condition of the buildings or fittings, the conformity of buildings with building regulations, any land wrongly included inside the fences, or any land in the title that is outside the fences. A buyer should make independent enquiries to verify the information contained in the vendor’s statement, and to discover any information not included in the statement. An omission or error in the vendor’s statement may allow the buyer to avoid the contract of sale without any penalty at any time before settlement. It is in the vendor’s best interest to ensure that the vendor’s statement is carefully prepared by their solicitor or conveyancer. If there is a dispute raised by the buyer, the vendor may challenge the contract avoidance and may win if a court is satisfied that the vendor acted honestly and reasonably and ought fairly to be excused for the wrong information, and that the buyer is in substantially as good a position as if all the information had been provided.