Pest clause

Hubby and I have ventured into our first investment property. One of five townhouses with a Body Corporate managed by another company. We live in Queensland. Our bank has given approval for our finance which has been sent to our conveyancer and the vendor's solicitor. Deposit paid. We are however, unhappy with the pest inspection report.

Our contract states we must be satisfied with the report and be reasonable. We understand building and pest can be thorough and highlight small to great concerns beyond structural or active pest findings. The building report more or less involves a couple of thousand dollars of repairs. The pest report is the one I take issue with. No pests were found but the report scope covers conduciveness to pest attack. This property has several undetected area issues. Some you would expect, (floorings, insulation in the ceiling obstructing examination etc), it is also not within the scope to have the adjoining townhouses tested, but this property has cladding covering the slab edge, gardening to the edge in one area, wooden pergolas, fencing with decay as well as some moisture issues within the unit. A chemical termite treatment plan that was in place to be renewed every five years was discovered lapsed past the eight year stage, placing the undetected areas at moderate to high risk. Our inspector was not impressed.

We asked to terminate on these grounds, alone, (unable to cite the Body Corporate records that show neglect and a High risk warning). Even if the BC addressed these issues if we are unfortunate to have a termite issue currently undetected happening now, it may not manifest itself until later, and no sorting our a barrier treatment in the future can prevent what may be already in place.

The vendor's solicitor was given our report and the clauses that we cited for termination. We do not wish to negotiate with our termination or to get back in on the deal as we are not happy with being in this termite grey area, given the BC and owners neglect. Yet the vendor's solicitor is trying to say a treatment plan is currently being implemented and checks have been done. That is overdue and not satisfactory. Our conveyancer has said we have terminated but the sellers are stalling on accepting.

Anyone advise on what our position is? Our lender is advised and although we are unconditional on finance and letters sent, she said the bank can write us a letter cancelling. Is that correct?

Apologies for the length of this.