Who is responsible for repairs found during a building inspection?

A building inspection is essential when purchasing a property, such as a house, apartment, or commercial space. It helps identify concealed issues and possible problems that might not be apparent to someone without the necessary expertise. But once these issues are identified, who is responsible for addressing them? The answer may be complicated, but understanding the various scenarios helps you navigate the process and protect your investment.

Buyer’s responsibility

The buyer is responsible for the building inspection cost. This is because the inspection is typically conducted after the buyer has made an offer on the property and is part of their due diligence process. The buyer hires the inspector to assess the property’s condition and identify any issues affecting its value or safety. If the inspection reveals minor issues, such as a leaky faucet or a loose doorknob, the buyer may address these items themselves after closing. However, the inspection uncovers more significant problems, such as a faulty foundation or a damaged roof. In that case, the buyer may need to discuss necessary repairs with the seller.

Seller’s responsibility

Sometimes, the seller may be responsible for addressing repairs found during a building inspection. This is often the case when the issues uncovered are related to the property’s safety. For example, suppose the inspection reveals that the property has a significant mould problem or that the electrical system is not up to code. In that case, the seller may be required to resolve these issues before closing. These problems pose severe health to the buyer and may violate local building codes or regulations.

In other cases, the seller may be responsible for repairs if they have made representations about the property’s condition that are found to be inaccurate during the inspection. For example, if the seller has claimed that the roof is in good condition, but the inspection reveals that it needs to be replaced, the seller may be responsible for the cost of the repairs.

Negotiating repairs

In many cases, the buyer and the seller will negotiate the responsibility for repairs found during a building inspection. This is where having a skilled real estate agent or attorney is invaluable. The buyer may request that the seller make certain repairs before closing or provide a credit towards the cost of the repairs. The seller may agree to these requests, counter with a different offer, or refuse any concessions.

If the buyer and seller cannot agree on repairs, the buyer may choose to walk away from the deal altogether. This is why it’s essential to thoroughly understand the property’s condition before making an offer and to build contingencies into the purchase agreement that allow for the possibility of repairs or credits. For building inspections in Sydney check vitalbuildinginspection.com.au/pricing/.

Commercial properties

Regarding commercial properties, the responsibility for repairs found during a building inspection is even more complex. Commercial properties often have multiple tenants, each with lease agreements and maintenance responsibilities. The maintenance of the building’s common areas and structural components, including the roof, foundation, and HVAC system, falls under the responsibility of the commercial property owner. However, tenants may be responsible for keeping their space and equipment or fixtures.

If a building inspection reveals issues with the property’s common areas or structural components, the owner will typically be responsible for addressing these repairs. However, if the problems are related to a specific tenant’s space or equipment, the responsibility may fall on the tenant, depending on the terms of their lease agreement. Buying a commercial property requires thoroughly examining all current lease agreements and understanding their condition. This diligence helps prevent disagreements regarding repair obligations and guarantees the property is a wise investment.

About The Author