Consumer Education: Due Diligence Questions to Ask BEFORE Signing A House Contract
Critical Questions Consumers should ask before entering into a Contract
We have written in detail on the subject of the new Seller’s Disclosure Regime in Queensland that will provide a prospective buyer a “Seller’s Disclosure” before they enter into a contract, and how it is essential to recognise the limitations with these obligations. Particularly the limitations on NO requirement for the Seller to make any disclosure on the structural soundness of a property nor any previous attempts at remediation, including not limited to any previous structural repairs and or any Building Approvals.
You can read more in that article “Buyer Beware: New property Law in Qld – Seller Disclosures” to find out more about why we use and recommend only RPEQ Structural Engineers.
Unfortunately, it is not unreasonable for a Buyer to assume that a disclosure process and statement by the Seller and Building and Pest Inspection covers all aspects and risk to them when purchasing a property. But this is simply NOT the case. We have made the decision as a leader in the industry to inform you, the consumer, about these issues.
In this guide, we set out a number of questions we consider beneficial to ask a seller, to assist a consumer to make an informed decision.
People may miss these crucial steps in assessing the property’s value and safety concerning structural soundness, because they are unaware of three things:-
The limitations of the Seller’s Disclosure Statement;
The limitations and small print in Building and Pest Reports, that the report is not a structural damage / soundness report;
If they encounter future issues with the property they purchased—such as those often seen with resin or polyurethane injection foundation repairs—they will have no recourse against the seller and no coverage from home insurance. Any costs for remediation will be their responsibility.
The above is not an exhaustive list, however in our experience, by a consumer gaining knowledge in the above areas, they are generally in a better decision to make an informed decision.
Here are the Critical Questions Consumers need to ask a Seller before you enter into a Contract:-
By asking these suggested 5 questions, in our experience and view, buyers can gain insights into the property's history and identify any red flags that may warrant further investigation in assessing the structural integrity of a property.
1. Has the property ever experienced any foundation problems or undergone repairs related to its foundation, including any resin or polyurethane injection work? If yes, can you please provide copies of the works contract, warranties, and/or maintenance recommendations?
Tip: This will disclose to you any works on the property, and if yes, ensure a correct handover of any information, warranties or maintenance programs recommended.
2. Have there been any reports or assessments conducted on the property's foundations or building inspection reports undertaken? If so, could you provide copies of those reports or quotes?
Tip: Not all cracks or movement require works, as the key to correctly assessing a property is whether the movement is historic and/or continued to be active with no action. A building inspection report may visually identify cracks, however only an expert RPEQ structural engineer specialising in foundations that visits the site can correctly assess. This is done by taking slab levels which assist in indicating the deflection of the slab and how much it has moved differentially. A RPEQ registered engineer will identify the cause and effects of movement, whether the movement is active, the correct remedy and scope of works. Then, if works are required, you have the correct facts to accurately assess the property and its safety and value. If the movement is old or not active and no works are required, you can then have peace of mind.
3. Have there been any QBCC claims, insurance claims or disputes related to the property's foundations in the past?
Tip: This will give you further information on the history of the property and any prior problems, not only at the build stage, but afterwards.
4. Has a plumber previously been engaged to repair broken pipes or drainage?
Tip: How is the drainage around the property? Excessive moisture around the dwelling and not having the correct falls can weaken the foundation over time, leading to structural issues that may require underpinning to reinforce the foundation's stability.
5. How old is the property, do you have any historical documents about the dwelling?
Tip: Understanding the historical movements of a dwelling regarding its original build/construction plans, plumbing plans, engineering reports, extensions to the property plans, etc are valuable to understanding the dwelling and its history or evolution. We often find that this information is not readily available but is worth asking. In an ideal world, these important documents would stay with the home for the life of the home for the next person that comes along, therefore assisting with maintaining and looking after the home’s performance into the future. Should the documents not be available, this may result in the engineer drawing a floor plan or the permitter diagram of the property.
Additional Due Diligence:
The real estate agent will have standard clauses to include a building and pest inspection, but they generally will not have one that covers structural or foundational issues. However, where you are purchasing a property that is built on a slab on the ground, we recommend before you enter into any contract, you ask your lawyer or conveyancer for a suitable clause for you to give to the real estate agent that also includes a satisfactory RPEQ Structural Engineer structural inspection on the foundations with levels.
FURTHER INFORMATION, RESOURSES AND ARTICLES:
To be fully informed on the subject of foundation issues and the facts you need to gather to make an informed choice of provider and resolution, you may wish to also read:-
1. Consumer Education: Due Diligence Questions For Resin Providers: Critical Questions Consumers should ask Resin Providers before engaging them
2. Consumer Education: Due Diligence Questions For Engineers: Critical Questions Consumers should ask Engineers before engaging them
3. Why We Rejected Resin For Subsidence issues in Residential Foundations with Reactive Clays
4. Foundation Solutions Screw Pile Method -v- Concrete bord piers
5. Buyer Beware: New property Law in Qld – Seller Disclosures
6. Top 8 Reasons to use Screw Pile Underpinning
7. Cracks in Walls> Here’s how to determine if they are serious (and what to do about them): Superficial, Serious or Structural
Disclaimer: The content on this blog/document is intended only to provide a general summary of information of interest - namely to get consumers thinking about what questions they ought to consider asking prior to engaging an entity to provide foundation advice/services.
It is not intended by the writer to be comprehensive nor does it constitute any sort of advice (building/legal or otherwise).
While Foundation Solutions endeavours to ensure that the content of this blog/document is and remains current, we do not guarantee its accuracy.
This is particularly the case whereby the building industry by its very nature is prone to changes in procedure and standards.
Further, this information is general in nature and does not take into account your personal circumstances.
No two structural foundation matters are the same and each matter needs to be reviewed before a proposal and your avenues available can be given to you for consideration.
You should seek professional advice before acting or relying on any of the content of this blog/document or engaging an entity for foundation services.
To be clear, your use of any information contained in this blog/document is not intended to create nor does it create a customer-client or fiduciary relation between Foundation Solutions and yourself.