Do Building Inspection Clauses Protect You in Victoria ?

When buying a house, it’s easy to get caught up in the excitement of it all. However, rushing things without due diligence can lead to problems.

For example, many Victorian homebuyers may not be aware of the potential limitations of a ‘subject to building inspection’ clause in a sales contract.
Buyers find it beneficial to sign a contract before a building inspection can be carried out because it offers protection.

But the wording of the clause suggests it may not cover buyers if they don’t use a licenced building inspector, or where issues aren’t
structural in nature.

We recommend, where possible, that buyers arrange a building and pest inspection
before they sign a contract.

Here’s what to look out for:.

1. Unregistered and uninsured inspectors

The building inspection industry is unregulated, which can open the door to unscrupulous and/or unqualified practitioners.

The inspection service you use should be registered with the Victoria Building Authority (VBA). If you use an unregistered inspector, and a report comes back saying there are structural or major defects, you may not be able to renegotiate or get out of a signed contract.

Your inspector should also be covered by professional indemnity (PI) insurance, as
this offers you protection if a significant defect gets missed.

2. Be wary of the term ‘in a structure’ in the clause

The clause specifies ‘a current defect in a structure. However, structural defects are not the only thing to consider. Even if a home is structurally sound, it could have a significant problem with under-house dampness, for example, or with the plumbing or wiring.

While these things are not structural, they could still be potentially expensive to fix, enough to deter you from committing to the purchase–but only if you are aware of them.

For these reasons, we recommend striking out the word ‘structure’ in the building inspection clause.

3. Don’t cave in under pressure!

It’s easy to feel pressured to sign a contract to secure a home. A selling agent’s job is to sell the property, and it’s not unusual for them to create a sense of urgency around signing on the dotted line. Make sure you don’t feel pressured to sign before you’re ready or before you’re satisfied that there are no significant issues with the property’s condition.

4. Don’t sign before you get the contract reviewed

Last but not least, you should have your conveyancer or a property lawyer, if you have one, review the contract before you sign. This helps ensure that you will be making a fully informed decision about the deal and that there are no nasty surprises.

If you arrange a building inspection before committing or have a conveyancer, adjust the wording of the contract to broaden the circumstances in which you can exit their contract; it helps put you in the driver’s seat.

The cost of a professional building inspection is not significant in the scheme of things, yet an inspection offers an enormous advantage. So, make sure you are not one of those buyers who sign first and ask questions later—book a professional building and pest inspection today!