"Subject to building inspection" Clause

[Beijos23]

Hi
I am looking at buying a strata villa in a group of 8. The units are all single storey. There is no common major facilities ie pool, lift, gym, etc. The only common thing really is the main driveway down the middle & about 5 visitor car parks.

Ive heard that when signing the contract I should put "Subject to building inspection". Although I don't expect anything to come up, as this will be a rental I feel I should get one done to make sure the place is safe/sturdy.

How does this work in practice? Once i get the building inspection done, what would constitute being unacceptable enough to stop the contract?

Does just listing that on the contract lead to any ambiguity? Should I be more specific?

Thanks in advance.

 

[Propertunity]

If you are making any "subject to" clauses like this, then put "subject to a pest & building report that is satisfactory to the purchaser".

That way anything from a dripping tap to a chipped tile, can be found to be unsatisfactory to you

 

[Beijos23]

Thanks, that's a very simple way of expressing it.

Also, is simply saying "subject to finance" enough - or should I say "Subject to finance & bank valuation" (ie - what if the bank val comes in under the purchase price & therefore I cant get the loan.)

Cheers

 

[Propertunity]

Subject to finance by X lender. Or, better still, subject to finance that is satisfactory to the purchaser.

You may get finance at too high an IR or too low an LVR. These might all be unsatisfactory to you.

 

[Terry_w]

You must get proper legal advice before drafting your own clauses.

See this WA case regarding a finance clause gone wrong:

Dodds v Kennedy [No.2] [2011] WASCA 131 http://decisions.justice.wa.gov.au/supreme/supdcsn.nsf/PDFJudgments-WebVw/2011WASCA0131/$FILE/2011WASCA0131.pdf

 

[Jake Milne]

Why would you include a building report clause?

It makes your offer much less competitive. The way to purchase is to organise the building inspection for a specific date, put your offer in and exercise your right to cool off if anything shows up that is a deal breaker.

If you really want the insurance of a get-out clause then have a solicitor write it up and include a financial amount in the clause of what is not acceptable.

 

[sanj]

Why would you include a building report clause?

It makes your offer much less competitive. The way to purchase is to organise the building inspection for a specific date, put your offer in and exercise your right to cool off if anything shows up that is a deal breaker.

If you really want the insurance of a get-out clause then have a solicitor write it up and include a financial amount in the clause of what is not acceptable.

there is no cooling off in perth.

building report clauses are standard in perth although generally sellers tend to insist on using the clauses that favour them, ie just dealing with structural issues.

i personally would have to be somewhat desperate to accept a clause worded like how prop has suggested but ive had them accepted in the past so is worth a try

 

[Jake Milne]

No cooling in WA? Wow, thanks for letting me know!

 

[redwing]

Thanks, that's a very simple way of expressing it.

Also, is simply saying "subject to finance" enough - or should I say "Subject to finance & bank valuation" (ie - what if the bank val comes in under the purchase price & therefore I cant get the loan.)

Cheers

Doesn't the standard WA Offer & Acceptance Contract have this Finance clause anyhow?

i.e. Finance Clause is Applicable Or Finance Clause is Not Applicable