Whether you’re a homebuyer or a seller, you shouldn’t ignore defect inspection reports since they can have major repercussions on the terms of the property transaction. These reports can serve to protect your interests if you know how to use them.
Impact of Defect Inspection Reports on Negotiations
Defect inspection reports are an important component of conditional sales contracts. For sellers, it is highly likely that you’ll need to repair defects before finalising the sale. Some contracts may allow the homebuyer to not proceed with the transaction if the defects are not addressed on time.
For homebuyers, defect inspection reports can give you leverage during negotiations. Aside from requiring repairs, you can lower the final sale price if the defects are severe or can’t be fixed by the seller.
The Legal and Financial Costs of the Defects Found
Defects discovered during inspections have both legal and financial ramifications.
For sellers, you may be legally obligated to disclose these defects. Additionally, if you skimp on the defect inspection report and it fails to identify major issues, you can get involved in a legal battle between the inspector and the homeowner. This can entail paying for the damages incurred by the homeowner as a result of the missed defects.
For homebuyers, not specifying in conditional sales contracts that defects must be fixed before the final sale can lead to you being sued for breach of contract if you refuse to proceed with the transaction. Even with a successful finalised sale, you’ll still have to pay for any defect repairs and can’t seek accountability from the seller.
Making Defect Inspection Reports Work for You
For sellers, it is in your best interest to hire a trusted and thorough inspector for preparing these reports. While it can be tempting to purposely miss a defect, doing this turns the report into a weapon against you instead of assurance against claims of wrongdoing.
For homebuyers, ensure that the defect inspection report has been properly prepared. If you think some defects were missed, request a re-inspection or another inspector. You will definitely regret letting these defects go once you’ve settled into your home.
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