These comments are the writer’s own and do not necessarily reflect the current opinions and policies of the Real Estate Institute of Western Australia.
Almost invariably, buyers of residential property seek to include in their offer to purchase 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 cracked roof tile. 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 widely, 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.
by Hayden Groves
REIA Deputy President