When looking to purchase a property in NSW, it is important to take steps before exchanging contracts to purchase a property unconditionally (including if purchasing at auction or where no cooling off period applies), to ensure you know the property and how you are going to purchase it. This blog will address the pre-purchase inspections (including building and pest inspections) that a purchaser should generally consider for the purchase of residential properties in NSW.
It's important to understand that certain properties may have issues requiring additional investigations that are not addressed in this blog. Your lawyer will be able to speak with you about any of these.
There are three things that should certainly be considered before exchanging contracts unconditionally:
After you enter into a Contract for Sale without a cooling-off period, you would have little ability to have the contract changed or to pull out of the contract without risking losing your deposit and being exposed to further claims from the vendor.
If a purchaser has unlimited time before exchange and unlimited access to the property, then they will be able to extensively investigate the property to know exactly what they were purchasing. Unfortunately, where there is a rush to exchange, or a vendor is unwilling to provide unrestricted access to their property, a practical decision needs to be made as to how far the purchaser goes to understand the quality and condition of the property they are purchasing.
As a minimum, before purchasing a property, purchasers should consider obtaining:
For Strata, a building and pest report of the entire Strata complex is usually impractical given the size of most strata complexes. The time it would take to obtain the report and the cost incurred makes this unfeasible in most cases. However, for small strata complexes (such as a 2 or 3 lot strata), a building inspection may be suitable.
The information contained in either of the above reports could have an impact on your decision to purchase the property.
As lawyers, our primary focus is on ensuring that the title of the property is conveyed to you (ie, that you own the right to the property). These building inspection reports often speak to the quality or physical condition of the property and, as such, we are typically unable to provide advice on the contents of the reports. Nor can we recommend that a purchaser proceed with the purchase or not,0 based on the contents of the reports.
The above inspections should be completed before contracts are unconditionally binding upon you. This is necessary to ensure that if the inspections identify any issues, you have the option to either factor this into your offer or decide whether you proceed with purchasing the property.
Three key things to remember.
Some of the additional searches a purchaser could consider for the purchase of a house include:
A survey is not a required document for the contract and if the vendor did not already have a survey, then it would usually be the purchaser's responsibility to obtain one at their cost.
While it may not be possible to understand all potential issues with a property before entering into contracts, the above pre-purchase inspections should be considered to assist you in obtaining some knowledge of precisely what it is you are purchasing so that an informed decision can be made.
E&A Lawyers has extensive experience in property transactions. We are able to assist you with all facets of your transaction from the relatively straightforward to the more complex with a view to minimising the potential risks associated with buying and selling property.
For more information to arrange a consultation with a lawyer, you can call or email us.
This article is of a general nature and should not be relied upon as legal advice. If you require further information, advice or assistance for your specific circumstances, please contact E&A Lawyers.