Many WA “Offer to Purchase” Contracts require building inspection to be undertaken in very short periods of time within a given event: For example:
- Within 7 days of Offer Acceptance
- Within 7 days of Finance Approval
Some of the key issues with the above requirements in the standard Real Estate Institute of WA Pre Purchase Building Inspection Clause include:
- The days counted are all days including weekends. Hence, the actual business days are substantially reduced.
- The REIWA clause does not specifically deal with restricted access by the property occupant which may impact on when the property can be inspected, especially if a property occupant in the property is self-isolated.
- There is a potential that a Building inspection may be impacted by illness or self-isolations requiring an alternative building inspector.
In the current environment it is suggested that Buyers and Sellers ensure that there is sufficient time allocated for building inspections to be completed and for reports to be delivered.
- Where a building inspection is to be undertaken immediately post Offer Acceptance, we would suggest that the minimum time allowed for the delivery of the inspection report to the Seller be extended to 15 days in the Perth metropolitan area and 25 days in Regional areas during the current pandemic.
- Where a building inspection is to be undertaken immediately, post Finance Approval, we would recommended that the minimum time allowed for the delivery of the inspection report to the Seller be extended to once again 15 days in the Perth metropolitan area and 25 days in Regional areas. It is important to note that extending this delivery date out this far from finance approval may impact settlement dates. Consequently consideration should be given to:
- Moving the building inspection to post Acceptance and not post Finance Approval. Key issue here being that if finance is not approved, the investment in the building inspection may be lost
- Moving the building inspection to pre offer. Key issue here being that if a subsequent offer is not accepted, the investment in the building inspection may be lost.
As always, Houspect recommends independent Legal Advice be obtained in the preparation of formal Contract documentation.
Houspect has a large team of Building Inspectors within the Perth Metropolitan areas as well as inspectors located in the majority of main Regional Areas.
March 2020
P 9240 8855
Build, Buy, Invest in property with confidence.
Ph 9240 8855 Web: www.houspect.com.au/wa Email: info.wa@houspectwa.com.au
