Hi, I recently had a building inspection done on a property I have had an offer accepted subject to finance, building inspection and pest inspection. (Standard Clauses – Now know i should have put "to buyers satisfaction).
In the report there are a few issues one been identified as a major defect which is that part of the roof frame is rotten and appears damage from past termite damage is present and that part of frame should be replaced.
Other issues include a wood connection is pulling away from the wood members and should be repaired, a leak in plumbing behind wall, and tiles/grout have deteriorated.
Alarms immediately rang when i saw the roof frame had rotted so I called the inspector but he said its only one portion and can be replaced. The house also has insulation and my concern is, what if there are other beams affected where the damage is hidden behind insulation? Inspection report has the disclaimer that only visible areas were checked. Should i be worried? Im questioning wether ro walk away or have the sellers repair the damage that was found. No sign of live termites were seen and it appears termites were sprayed some time ago.
My other question is the damaged tiles and grout…is it common for these to leak in a 12 year old house? Should the seller have to repair this or would this be ";Standard wear and tear"; and my responsibility. I know the leak behind the wall will need to be repaired by seller as there is a clause that says or plumbing should be in correct working order.
Hi Bedford and welcome to our little forum!
The answer you seek is a simple one. You made your contract 'subject to satisfactory building and pest inspection'. Your inspector(s) have found fault that would need repairing by the vendor prior to you fulfilling your obligation to buy the property. If you are unsure about the actual underlying condition, or feel there could be more unforeseen trouble ahead, I would simply bail unless it's a really good buy. But, if it's a really good buy then maybe, with the superficial faults already detected by the building/pest inspector, that is why it's such a really good buy. Just some food for thought but you certainly have the legal grounds to simply negate the contract upon the failure of the inspections.
PS: Think about it – significant termite damage seen superficially in the frame of house that is only 12 years old?
I’ll put on my builder’s hat here: 12 yrs old substantial deterioration of timbers, members pulling apart, termite damage, water leaks (feed termites). Go out a get a pet echidna.
As a rule, never buy someone elses problems. Unless you know how to deal with them better than they do and can profit from it.
My guess is you don't know how to deal with it better than the previous owner. And the deal is not a bargain, or you would have stated it as such.
Walk away, there will always be another one.
Cheers for the comments. The house is a good house and block has subdivision potential (triplex block if current house is demolished). After speaking to the inspector he commented saying is was a small area affected and can be easily fixed.
Im still leaning towards walking away just for the fact not all beams were visible so who knows what is laying inder the insulation!
Thanks again! (bit of a property novice)
Should say the house is too good to demolish currently. So subdivion potential would be down the track say 10 years!
Perhaps you could get a more invasive termite inspection done?
I have no idea how much this would cost or how certain the outcome. Have a chat with the inspector?
Hi again Bedford.
There are pest inspectors who use thermal imagery to see if there are any active termites in a structure which is completely non-invasive. I used one a few years back on a heritage listed IP where the inspector was not allowed to cut inspection holes to complete a visual check for termites. Yes, there had been signs of termite activity before due to visual damage however, the thermal imagery confirmed that the termite treatment used by the vendor of 40 years had indeed eradicated the termite activity and any major nesting.
I hope this has been of some further help for you.bedfordproperty wrote:Should say the house is too good to demolish currently. So subdivion potential would be down the track say 10 years!If the numbers work to do it now (subdivide) why not just do it now?
Property we settle on in a couple of weeks has similair issue. We got bluiders quote to recitify and termite treatemnt costs and insisted vendor fix prior to settlemt or compensate the costs off the purchase price. We got $20000 of purchase price.
We probably wont even get the repairs done as it makes more sense to proceed to develop the property now regardless of the fact our/ this property has excellent yield (dual occupancy) and the house outside of that being in good order.
Remember biggest possible return/profit in shortest period of time
Food (wood) for thought
Hi again. So decided to walk away mainly due to termite damage. Formerly notified realestate agent via email that i was terminating the contract. Now the vendors are questioning the building report and the qualifications of the building inspector. Stated they are not willing to accept the report and settlement date will still go ahead. Can they do that? He goes onto say that he knew of the termite damage but it is minor and was fixed to their satisfaction when they bought the house. Also with the wood member pulling apart seller says that this is common and due to timber shrinkage. They go on to say the cracked tiles are cosmetic and there is no water penetration.
Even if the termite damage visible is "minor" as there was insulation in the roof there is a possibility there is more damage hidden as beams were hidden by insulation. Im beginning to get worried and feeling more unsure of the house. Can they even reject the report. Goes on to say he will get a registered builder at his cost to review the building and fix the beam with termite damage. My worry is he appears to work for a building company group. Even the settlement agent was from the same company group as himself. Should they have disclosed the termite damage?
Also i have aready notified the bank i am not proceeding so finance was never approved anyway. With finance due next week probably wont make the finance deadline anyway. Will i lose my deposit.
Also Beedie cheers for your comment but dont have the money to subdivide now so the plan was actually to live in the house for at least 5 years.
Thanks for your help.
Hi Bedford.
Tell the Vendor to go and do something anatomically impossible – way too keen to offload his property onto you which is supporting the concerns you have projected in this forum. Anyway, the Vendor is not a qualified building inspector and your inspector has indicated a clear FAIL on the inspection. I believe in a simple credo: "If in doubt, leave it out". There'll be no shortage of other IP for you to purchase that will give you peace of mind and allow you to sleep at nights. Well done!
PS You must have your FULL deposit returned as the contract for sale 'conditions' have not been met.
Cheers Anthony. Will let realestate agent know we are not willing to negotiate and will be walking away.
Things are now getting more concerning. After send the formal email to the realestate agent cancelling contract she replied saying do we want to give owners the chance to fix it. Contract had two options a) to cancel immediately or b) submit a significant defect report. We did option a). We replied again saying no we want to exercise our right to cancel the contract. Since than we havent heard anything from the realestate agent. Turns out instead she has gone to our settlement agent (who has already sent us a formal letter saying they have been advised settlement will not be continuing) and discusses the report over phone saying they do not think it is significant.
Received a a forwarded email saying the settlement agent will call the building inspector. Have i missed something!! Im really not happy that the realestate agent has gone behind my back. I consider this unethical and unproffessional. All other corespondance was to us CC'ing settlement agent in and now I believe deliberately left me out.
Going to write back that we have exercised option a) and the deposit money should be returned. Seems the contract does not give a time frame to when the money should be returned. So im assuming a "reasonable" time will be used. How long would be a "reasonable" time to have the deposit returned. Thinking I may need to seek a solicitor.
Agree with your summation. Get some decent legal advice from a good solicitor ASAP.
By law, the building inspector cannot give your report to anyone else. It is your report. It should say this somewhere in your building inspection report. I had an inspector confirm this with me during my last purchase. The selling agent confirmed this and said it was "illegal" for him to show it to anyone else, even if he did have access to it.
I imagine they can call or engage the inspector on their own. but this engagement would have nothing to do with your engagement. Again, see a solicitor.
Can't advise on what the agent can and cannot do by law. You need a solicitor. Have them conduct all communications with the vendor (or vendors representative) on your behalf. I would stop talking to anyone until I had spoken with this solicitor.
As for when the funds must be returned, I think there is a legislation around this. The deposit funds should be held in a trust of some sort, usually a solicitors trust fund representing the seller.
Time to "lawyer up" my friend. Consider the expense an investment. Just like the cost of the building inspection report.
Sometimes the very act of "flexing the legal muscle" will scare them into action.
They might be trying to take advantage of you as an uninformed buyer. Thus pressuring you into agreeing to buy.
"Lawyer-up"
I have different case here… there is subsidence happening due to broken underground stormwater pipes which will cost a fortune to fix it..
the thing is I only put "subject to building inspection" (without "to buyer's satisfaction") in the contract…
I would rather pull out from the contract rather than proceed to buy it…
however the vendor's lawyer wants to bring this to court due to breach of contract as building inspection has been done and there is no "to buyer satisfaction" clause on it
any advice?
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