Building and Pest – Pass or Fail
One of the most common questions we hear is:
“Did the property pass the building and pest inspection?”
The answer may surprise you.
Under the standard Queensland Contract for Houses and Residential Land, there is actually no such thing as a building and pest “pass” or “fail”.
Why?
The Building and Pest condition is designed to protect buyers.
It allows a buyer to secure a property while obtaining independent building and pest inspections. If the reports are not satisfactory to the buyer, the buyer may have the right to terminate the contract without penalty, provided they comply with the terms of the contract.
This protection generally does not apply to properties purchased at auction, as auction contracts are usually unconditional.
Clause 4.2 of the standard contract states, in part:
“This contract is conditional upon the Buyer obtaining a written building report from a Building Inspector and a written pest report from a Pest Inspector (which may be a single report) on the Property by the Inspection Date on terms satisfactory to the Buyer.”
The contract also requires the buyer to take all reasonable steps to obtain the reports.
The inspector must be licensed
One point many buyers don’t realise is that the inspections must be carried out by appropriately licensed inspectors.
Having a family member, friend or builder “have a look” is always worthwhile for your own information, but it does not satisfy the contractual Building and Pest condition. If a dispute arose, relying on someone who isn’t appropriately licensed could create complications.
What does “satisfactory to the Buyer” actually mean?
This is the important part.
The contract doesn’t ask whether the property passes or fails.
It asks whether the buyer is satisfied with the reports.
That means two different buyers could receive exactly the same report and make completely different decisions.
One buyer may happily proceed with a home that needs significant repairs because they were expecting a renovation project. Another buyer may decide the same issues are more than they are prepared to take on.
Both decisions can be entirely reasonable.
Buyers should still do their homework
Before making an offer, buyers should inspect the property carefully.
Look at the overall condition of the home. Are the fences leaning? Is there evidence of water staining? Are there visible cracks or obvious maintenance issues?
You aren’t expected to be a building expert, which is exactly why building and pest inspections exist. However, the Building and Pest condition is intended as consumer protection, not simply as a tool to renegotiate a purchase because of defects that were obvious from the outset.
What happens if the report identifies a significant issue?
Sometimes an inspection uncovers something neither party knew about.
If that happens, the buyer may still wish to proceed, but on different terms.
This is where negotiation often comes into play. The buyer and seller may agree on a price adjustment, repairs before settlement, or simply agree to continue with the contract unchanged.
Every situation is different, and the outcome will depend on what both parties consider reasonable.
The takeaway
Building and Pest isn’t about achieving a “pass” or “fail”.
It’s about giving buyers the opportunity to obtain expert advice and decide whether the property’s condition is satisfactory to them under the terms of the contract.
As always, every contract is different and this is general information only. If you’re unsure about your rights or obligations, you should seek advice from your solicitor or conveyancer before making any decisions.
We regularly share practical tips to help Queensland buyers understand the property buying process with confidence. If there’s a topic you’d like us to cover, let us know.
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Written by Shawn Kristofer