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Buying a house – YOU are responsible for the terms of the contract.
Why do people rush headlong into spending $250,000 or $300,000 plus on a house without making even the most basic attempts to protect themselves? I guess it’s because we’ve become used to the protections that consumer law brings us.
But consumer law doesn’t really apply to house purchases. The nature of the standard Contract of Sale by Offer and Acceptance used is one of “caveat emptor” or let the buyer beware. This essentially means that once you own the property, you also own any problems associated with it, so find out what they might be. Here’s a few suggestions BEFORE you sign an offer to purchase:
- Get a builder to look at the property with you. Don’t rely on the standard building inspection clause because it only gives you rights if the house has structural defects. There’s lots of other defects that can also be a big problem.
- Run the draft contract past a lawyer or settlement agent to make sure you understand it and that it represents your requirements.
Make sure the offer includes the following clauses:
- A termite clause that gives you rights to terminate the contract if the seller won’t eradicate any termite infestation or repair any damage caused by termites.
- A settlement condition clause that requires all plumbing, gas and electrical fixtures, fittings and appliances to be in good working order before
- A State government regulations clause requiring legal compliance for safety switches (RCD’s), hard-wired smoke alarms and swimming pool/spa
- If you want the property professionally cleaned, then a clause stipulating it.
- If you are concerned whether the improvements on the property have council approval, either make enquiries of the council before you sign the offer, make the contract conditional on it, or do neither and take out a title insurance policy to protect yourself.
Without these, the property just needs to be in the same condition at settlement as it was when you inspected it before signing the offer. Take responsibility for your contract. Once you’ve entered into it, you and the seller are both bound by its very precise terms and once you’re in, it’s very hard to get out.