How to Protect Yourself with a Building & Pest Condition
When buying a house in Victoria, a building and pest condition is one of the most powerful tools you have to avoid costly surprises.
But here’s the problem: not all building and pest clauses are equal.
In fact, many contracts include conditions so vague or poorly drafted that they’re practically useless. You could discover major defects, termites, or structural faults — and still be stuck in the contract with no clear right to walk away.
At Victorian Property Settlements, we help you get this clause right before you sign — so if there’s a serious problem, you can either renegotiate or cancel the contract with confidence.
What Is a Building and Pest Condition?
A building and pest condition is a clause in the Contract of Sale that makes your purchase subject to the outcome of independent inspections.
If the reports reveal major structural defects or timber pest infestations, and the clause is correctly worded and used, you can:
Walk away without penalty
Renegotiate the purchase price or terms
Require the vendor to make repairs or provide compensation
But these rights only apply if:
The clause defines what counts as a serious defect
You use a licensed inspector
You act within the deadline
You notify the vendor properly, in writing
If you fail to meet even one of those requirements, you may be bound to settle anyway.
The Problem With Standard Clauses
Most real estate agents use the General Conditions 21 and 22 of the standard REIV contract:
GC21 covers building inspections
GC22 covers pest inspections
These clauses do not define what a "major defect" or "serious infestation" actually means — and that’s where buyers often come undone.
Here’s what we commonly see go wrong:
❌ You use a private inspector who isn’t properly licensed
❌ You get the report but don’t notify the vendor in time
❌ You notify the agent, but not the vendor’s legal representative
❌ The condition says “major defect” — but doesn’t define the term
❌ The clause expires before your inspection is booked
Result? Your right to withdraw is gone. The contract becomes unconditional — and your deposit is now at risk.
How We Fix It — Our Combined Building & Pest Condition
At Victorian Property Settlements, we don’t rely on generic conditions. We’ve developed a unified clause that protects you properly and holds up in practice.
Our condition:
✅ Allows 14 days to obtain both a building and pest report
✅ Defines “major structural defect” as requiring repairs over $5,000
✅ Defines “active infestation” as live timber pests needing treatment over $5,000
✅ Allows you to rescind or renegotiate if serious issues are found
✅ Survives until settlement — meaning the protection doesn’t vanish after 14 days
✅ Requires the vendor to provide access for inspections at reasonable times
This sets clear expectations for who does what, when, and what happens if they don’t. It removes ambiguity, aligns with current practice, and gives you real leverage in the event of a problem.
What Happens If the Reports Reveal a Problem?
If your building or pest report reveals serious issues, you must:
Notify the vendor in writing before the deadline stated in the contract
Include a copy of the report
Clearly state whether you are:
– Rescinding the contract
– Requesting a price reduction or repairs
– Asking for a deadline extension to investigate further
We assist with drafting and delivering this notice to make sure your rights are preserved.
Important: You cannot just "change your mind" or "feel uncomfortable" — you must point to a qualified report and act within the required timeframe.
What If the Deadline Passes?
Once the condition deadline expires, and you haven’t raised any issues, the clause is considered waived. The contract becomes unconditional — even if you find major structural issues the next day.
This is why we insist on clear diary dates, reminders, and early inspections — you do not want to be discovering defects at the final inspection and then learning it’s too late to do anything about them.
What If There’s No Clause in the Contract?
Some contracts don’t include a building and pest condition at all — especially when:
The property is being sold at auction
The sale is structured to favour the vendor
The buyer signed too quickly without review
If the clause is missing, we can usually negotiate to insert it before the contract is signed. Once the contract is fully executed, however, it’s difficult (and often impossible) to add the condition — especially in private sales where the vendor has already accepted the offer.
If the property is already under contract without a building and pest clause, your only option may be to proceed unconditionally — regardless of the outcome of your reports.
Our Advice for Purchasers
When buying a home, you should:
✅ Always request a building and pest clause that uses clear definitions and timeframes
✅ Ensure the contract allows access to the property for inspections
✅ Use qualified, licensed inspectors only
✅ Book your inspections as soon as possible after signing
✅ Let us review the report and help prepare any rescission or renegotiation notice
If the clause is vague, if the timing is tight, or if you’re unsure what the report means — don’t leave it to chance. We’ll handle the process and protect your position.
Need a Clause Added or a Contract Reviewed?
We’ve helped hundreds of buyers protect themselves with customised building and pest conditions tailored to the property and contract.
Whether you’re:
Reviewing a contract before you sign
Negotiating with a vendor over an inspection result
Unsure whether the clause you’ve been given is valid
We’ll make sure your rights are clear — and that you don’t get caught buying a lemon with no way out.
Click here to request a contract review
Victorian Property Settlements
Trusted by Victorian buyers and sellers for over 25 years
www.victorianpropertysettlements.com.au