DODGY REAL ESTATE CONDITIONS OF OFFER
Don’t sign the Special Conditions in your Offer & Acceptance until you fully understand the possible consequences.
If you are going to ask for Special Conditions such as a Pre-purchase property inspection and/or a timber pest inspection then read on….
Your pre-purchase property and timber pest reports are only of use if there are ACTION clauses in the Special Conditions, that is, what happens if defects are found.
Realtors and Vendors are renowned for placing restrictive Special Conditions, such as
“ A structural Defects Report” that will restrict you to negotiating on remedial work to purely structural defects.
Make sure that you insist on having the words “A pre-purchase property inspection to
AS 4349.1:2007”. You should then get a report on structural and non-structural elements of the property.
Further, make sure that there is an “action” clause that follows. Wording such as “the purchaser reserves the right to seek negotiation on defects reported on” or that the Report “is to the Satisfaction of the Purchaser”.
Ideally include a time frame for the Vendor to respond to your requests for any defect remediation and a time frame for those remedial works to be completed by.
Usually it is best to negotiate for financial consideration towards the costs of remedial works, and for that you MUST get actual quotations form tradespeople. If the Vendor undertakes remedial works then they choose who does the work. It is best if you choose who does the work, and when.
Remember this, there is no legal requirement for Vendors to repair any defects (other than unsafe electrical defects or structural defects that are risk of catastrophic failure).
There is the notion of reasonable wear and tear to consider, and it is my view that minor defects that result from reasonable wear and tear should not be negotiable. Buying and existing home should not guarantee a defect-free home.
The purpose of this Blog is to advise prospective Buyers to approach Special Conditions with due diligence and care. The Special Conditions are there principally to protect you, not the Realtor or the vendor.