What is a building and pest inspection?
A building and pest inspection is a physical inspection of the property, carried out by a qualified inspector before your contract goes unconditional. It is separate from the searches your conveyancer runs: searches check the records, an inspection checks the building itself. It is usually two things bundled together, a building inspection of the structure and a pest (timber pest) inspection for termites and other timber damage.
What does a building and pest inspection cover?
A standard inspection is visual and non-invasive. It generally covers:
- Structure and movement: foundations, walls, significant cracking or subsidence.
- Roof and roof space: leaks, sagging, damaged timbers.
- Timber and moisture: rot, rising damp, drainage problems.
- Pest activity: live termites, past termite damage, and the conditions that attract them.
- Safety and obvious defects: and often the first signs of unapproved or non-compliant building work that a records search might only hint at.
What does a building and pest inspection not cover?
Because it is visual and non-invasive, the inspector won't cut into walls, lift floor coverings, or move the seller's furniture, so anything concealed can stay hidden. An inspection also does not settle:
- Concealed or underground problems: issues behind walls, under floors, or in pipes and drains that cannot be seen.
- Whether past work was approved: confirming council approvals and certificates for earlier renovations is a records question for your conveyancer, not something the inspection decides.
- Specialist testing: asbestos, electrical or plumbing certification, or a full engineering assessment each need their own specialist.
If the report hints at possible unapproved work, cross-check it against your searches. For the record-based side of due diligence, see dealing with adverse property search results.
When should you bring in a structural engineer or builder?
A standard report is enough for most homes. But if the property is older, visibly altered or extended, or the report flags something structural, it is worth engaging a structural engineer (for movement or cracking) or a licensed builder to inspect and, ideally, walk the findings through with you, so you understand how serious it is and what it would cost to fix before you are committed.
How do building and pest conditions work in QLD, NSW and VIC?
In most contracts the building and pest inspection is a condition with a deadline: you have a set period to complete the inspection and act on it, then satisfy the condition, negotiate, or give written notice to terminate. Miss the deadline and the condition is generally treated as satisfied, so you lose that exit. How the condition gets into your contract differs by state.
- Queensland: building and pest is a standard condition in the REIQ contract, with the inspection date set in the contract. To end the contract on the report you generally have to act reasonably: major structural problems or serious termite activity are the strong grounds, minor or cosmetic items are not.
- New South Wales: it is not a standard contract condition. Buyers usually inspect before exchanging contracts, or during the short cooling-off period after exchange, or have their solicitor or conveyancer add it as a special condition. There is no cooling-off period when you buy at auction, so treat inspections as pre-auction due diligence. Ask before you sign.
- Victoria: it is usually added as a condition rather than built in, so confirm it is in your contract. Where a building condition applies, terminating generally requires the report to show a major or structural defect, which is a higher bar than minor faults.
For how conditions and their deadlines work, see complying with contract conditions.
What can you do once you have the report?
A report with problems in it does not end the purchase by itself. You generally have three pathways:
- Satisfy the condition and proceed: if the findings are minor or you are comfortable with them.
- Negotiate a repair or price reduction: ask the seller to fix the issue before settlement, or to reduce the price so you can.
- Terminate: give written notice within the condition's deadline, where the problem is serious enough to justify it under your contract.
If you negotiate a price reduction rather than repairs, tell your mortgage broker or lender: changing the agreed price can trigger a loan reassessment, which takes time and can put a settlement date that is close at risk. If you agree the seller will do the repairs, ask for receipts and any compliance certificates from licensed trades before settlement.
Can a bad building and pest report let you pull out?
Not automatically. Finding problems doesn't by itself give you a right to terminate: that depends on your contract and how serious the issue is. As a rule, the strong grounds are major or structural problems (significant movement or subsidence, failed load-bearing elements, a compromised roof structure) and active termite activity. Minor, cosmetic or maintenance items (hairline cracks, sticking doors, worn paint) usually don't meet the bar, and trying to exit over them can put your deposit at risk. What counts as "major", and how much room you have to act, varies by state and by the wording of your condition, so have your conveyancer read the report against your contract before you give any notice.
General information only, not legal advice. Conveyancing law varies by state and changes over time; confirm your situation with a licensed conveyancer or solicitor.
