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Signing a Contract
Conveyancing Resource Centre

What happens if I find an issue with my searches?

Finding an issue with a search can be disheartening for buyers and it really depends on the nature of the search, and whether the contract has been signed as to what rights they may have. This is because not every search gives a right to terminate.

In Queensland, the onus is on the buyer to obtain searches and satisfy itself about the property. There is no obligation on the seller to tell a buyer about the property or any of its defects or other issues, save and except for certain contractual warranties and statutory disclosure requirements and/or common law requirements.

Unfortunately, common practice is that contracts are usually signed first and searches conducted afterwards. This often leads to serious problems as issues in search results may not be identified in time.

Where the contract has not yet been signed, a buyer can protect themselves from unsatisfactory search results by either not proceeding, negotiating the price or including special conditions.

Most standard form contracts do not contain any rights to terminate if searches reveal that the property is subject to flooding. These types of contracts also do not contain any rights to terminate if searches reveal that the improvements, or any additions to the improvements, do not have appropriate approvals. The lack of a required approval may have significant ramifications for the lawful use of a building on the property and for the ability to even obtain insurance cover.

The only opportunity under the contract to terminate for building issues is if a property notice, such as a show cause or enforcement notice, existed prior to entering into the contract itself. If searches reveal unsatisfactory results, you may need individual advice about your contractual rights and any remedies you may have. The advice will depend on the nature of the unsatisfactory search result and your contract terms.

In some cases, such as finding major structural issues in a building and pest report, depending on the conditions of the contract, you may be able to terminate or negotiate a better price. In some cases, buyers may even be able to negotiate that the sellers fix the defect/s prior to the settlement. 

If you need more specific advice about your matter, please contact us by clicking here.

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