My Building Inspection Found a Major Defect — What Happens Now?
You already have the building inspection report — and it has identified a major defect. The important question now is what that finding actually means for the property purchase and what you should do before proceeding.
First: don't panic because the report says “major defect”
Building inspection reports can be confronting. A report may contain photographs, defect classifications, recommendations and repair items that were not obvious when you viewed the property.
The words major defect deserve attention, but they should be considered in context. The nature of the defect, the likely cause, the extent of the affected area and the likely rectification work are often more useful than the label by itself.
Some defects can be significant but relatively straightforward to rectify. Others can indicate movement, deterioration, moisture damage or another underlying issue that warrants much closer consideration.
What does “major defect” mean?
In Australian pre-purchase inspection reporting, a major defect is generally a defect of sufficient magnitude that rectification is required to avoid unsafe conditions, loss of utility or further deterioration of the property.
Examples can include significant building movement, substantial cracking, serious deterioration, structural timber damage, major moisture-related deterioration or failure of important building elements.
Does the seller have to fix a major defect?
Not automatically.
One of the most common misunderstandings after receiving a building report is that every defect identified by the inspector becomes the seller's responsibility.
Whether you can require rectification, renegotiate, terminate the contract or simply accept the property in its existing condition depends on the contract you signed and the jurisdiction in which you are purchasing.
A defect can also be expensive without necessarily giving a buyer a contractual right to require the seller to repair it.
Can I renegotiate the purchase price?
A significant inspection finding can become part of a negotiation between buyer and seller. Buyers may seek a price adjustment, request rectification before settlement or decide that they are still comfortable proceeding with the purchase.
However, the ability to negotiate should not be confused with an automatic contractual right to force the seller to reduce the price. The seller may agree, refuse or propose another solution.
Repair cost matters
Before negotiating, try to understand the likely scope and cost of the work. A defect described in only a few lines of an inspection report can sometimes represent substantial rectification work. Equally, a defect carrying a serious classification may sometimes have a relatively contained repair.
Can I withdraw from the purchase?
Sometimes — but a building report containing a major defect does not automatically cancel a property contract.
Your rights depend heavily on the contract, any building or building-and-pest condition, the inspection deadline, the wording of the report and the state or territory in which the property is being purchased.
If you are considering terminating a contract, obtain advice from your conveyancer, settlement agent or property solicitor promptly. Contractual notice periods can be short.
Why your location matters
Property contracts and inspection conditions are not identical across Australia. The same inspection finding can therefore have different contractual consequences depending on where you are buying.
Western Australia
Many WA purchases use an inspection condition concerned specifically with major structural defects. A serious non-structural defect may therefore be important and expensive without necessarily producing the same contractual remedy as a qualifying major structural defect. The wording of the actual contract and annexure is critical.
Queensland
Queensland contracts commonly include a building and pest condition. Under the standard framework, the buyer's satisfaction with the reports and the requirement to act reasonably can be important. The report and contractual due date should be reviewed promptly before the condition expires.
New South Wales
Building reports are often obtained before exchange, although inspections can also occur during an applicable cooling-off period. Findings may influence negotiations or the buyer's decision to proceed, but timing and the particular transaction matter.
Victoria
A private-sale contract may contain a building inspection condition. The exact wording is important because contractual rights can depend on the report identifying a defect that meets the requirements of that condition.
What should I do after receiving the report?
Identify the important findings
Separate significant defects from maintenance items and minor observations. A long defect list does not necessarily mean the property has serious underlying problems.
Understand the likely repair implications
Consider what work may actually be required, whether further investigation is recommended and the likely order of repair costs.
Check your contract and deadlines
If the property is already under contract, check the building inspection or building-and-pest condition immediately. Do not assume that the terminology used in the report automatically determines your contractual rights.
Decide what matters to you as the buyer
Depending on the circumstances, you may still proceed, seek further information, negotiate with the seller, request rectification or consider your contractual options.
Major defect vs major structural defect
This is one of the most important distinctions for buyers to understand.
A major defect can be a serious issue requiring rectification, but it does not necessarily involve the structural performance of the building.
A major structural defect concerns the structural building and may involve elements such as foundations, footings, load-bearing walls, structural floor systems, beams, columns or roof framing.
This distinction can have contractual significance. For example, commonly used WA inspection conditions can focus specifically on major structural defects rather than every major or expensive defect identified during an inspection.
What if the report is difficult to understand?
Inspection reports are written primarily to document observed conditions. That can leave buyers with a list of defects but without a clear picture of which findings deserve the most attention, what the likely repair implications are or what should be raised before proceeding.
This is where an independent review of the existing report can be useful. You do not necessarily need another inspection simply to have the report translated into a clearer list of priorities.
Frequently asked questions
Should I buy a house with a major defect?
The classification alone is not enough to answer that question. Consider the nature and extent of the defect, likely repair work, cost, risk of further deterioration and the overall property purchase. Some major defects are manageable; others can materially change the economics of the purchase.
Does a major defect mean the house is unsafe?
Not necessarily. A report may classify a defect as major because rectification is required to prevent further deterioration or loss of utility. Immediate safety hazards should normally be identified separately or clearly highlighted in the report.
Who pays for repairs found in a building inspection?
There is no Australia-wide rule that automatically makes the seller responsible for every defect. Responsibility and the buyer's options depend on the contract, the type of defect and the circumstances of the transaction.
Can I ask the seller to reduce the price?
Buyers can seek to negotiate where significant defects or repair costs have been identified. Whether the seller agrees to a price reduction, rectification or another arrangement is a separate question from any rights provided by the contract.
What if my report contains several major defects?
Look at the findings together rather than simply counting them. Multiple defects may have a common underlying cause, while other findings may be unrelated. Understanding likely repair scope and priorities is more useful than the number of items alone.
You have the report. Now understand what it means.
BuyerReport reviews your existing building inspection report and helps turn technical findings into clear priorities, repair-cost guidance and practical information you can use before making your next decision.
Upload Your Building ReportGeneral information only. BuyerReport provides building inspection report review and property-condition information and does not provide legal or conveyancing advice. Contract rights vary according to the wording of the contract, jurisdiction and individual circumstances. Obtain advice from your conveyancer, settlement agent or solicitor regarding your particular contract and any applicable deadlines.