The $15,000 Mistake: What Happens If You Don’t Book a Building and Pest Inspection Properly

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Every week, buyers across Victoria miss their chance to walk away from a bad property deal — not because there wasn’t something wrong, but because their building and pest inspection clause was invalid, expired, or used the wrong inspector.

It’s an easy mistake to make. But it can cost you tens of thousands — or worse, trap you in a contract with no escape.

As David Dawn, Licensed Conveyancer at Victorian Property Settlements, explains:

“A lot of buyers think they’re protected because the clause is ‘in there’. But unless it’s done right — and on time — that clause might not protect you at all.”

Why Inspections Matter in Victoria

Most property contracts in Victoria include either:

  • A combined Building and Pest Inspection Condition (common in private sales), or

  • A tailored version added by the buyer’s conveyancer

These clauses let a purchaser rescind the contract (get out without penalty) if a major structural defect or active timber pest infestation is discovered — usually within 7 to 14 days of signing.

But there’s a catch:
You must comply with every detail of the condition — or you lose your right to terminate.

Mistake #1: Using the Wrong Inspector

Most REIV standard conditions require that:

  • A building report be issued by a registered builder or licensed architect

  • A pest report be issued by a licensed pest control operator under Victorian law

If you use a handyman or unregistered operator, your report is worthless, even if it finds serious defects. The vendor doesn’t have to accept it — and you can’t get out of the contract.

✅ Tip: Always check your inspector’s licence number and qualifications before booking.

Mistake #2: Missing the Deadline

Most clauses include a strict time limit — usually 7 or 14 days from the date the contract is signed.

If you don’t serve a notice in time:

  • You lose the right to cancel

  • You are deemed to have accepted the property

  • The clause is automatically waived, and you’re stuck

✅ Tip: You must give notice in writing and before the deadline — even if no defects are found, just to protect your position.

Mistake #3: Being in Breach of Another Condition

Even if your inspection reveals a major problem, you can’t rely on the clause if you’re in breach of another term of the contract — like:

  • Failing to pay the deposit on time

  • Signing late

  • Not giving access to the property for inspection

✅ Tip: Make sure you’re fully compliant with every obligation before trying to exit under an inspection clause.

What Counts as a Major Structural Defect or Infestation?

At Victorian Property Settlements, we use a modern combined clause that defines:

  • Major Structural Defect as any issue requiring repairs over $20,000

  • Active Infestation as live pests with rectification costs over $5,000

The REIV version does not include these definitions — so disputes often arise over what “major” means. Without clarity, you risk litigation.

✅ Tip: Ask for a combined clause that includes clear definitions, so you’re not relying on vague wording.

Case Study: The Wombat and the Warped Floorboards

A client once used an unlicensed “mate” to do an informal building inspection. The report found water damage, but the inspector wasn’t qualified under the REIV clause.

We advised the client to withdraw their offer before the cooling-off period expired — but they didn’t.

A week later, the floor collapsed in one corner. The cause? A wombat tunnel beneath the house. The buyer was stuck with a $15,000 repair bill — and no right to cancel.

Conclusion: The Clause Is Useless Unless You Use It Properly

Just having a building and pest clause doesn’t mean you’re safe.
✅ The inspector must be licensed
✅ The timeline must be met
✅ The notice must be given correctly
✅ And you must not be in breach of any other obligation

That’s why Victorian Property Settlements has created a standard combined clause that works — with clear rights, timelines, and enforceability.

Need help reviewing your contract before signing?

Contact Victorian Property Settlements today for advice that protects your rights — not just paperwork.

Victorian Property Settlements – Trusted for over 25 years by Victorian buyers and sellers.