Building and Pest Inspections for Buyers in NSW

Finding the right home can come with pressure to sign quickly, particularly when other buyers are interested. A building and pest inspection is one of the few chances you have to understand the condition of the property before you are legally bound. Once contracts are exchanged and any cooling-off period ends, your options are usually far more limited.

If you are considering a property in Hornsby or a nearby suburb, Caspian Legal can review the contract and talk you through inspection timing before you exchange. Call 02 7264 3200 or visit caspianlegal.com.au to book a consultation.

Is a building and pest inspection compulsory in NSW?

No. NSW law does not require a buyer to obtain a building or pest inspection report before buying a home. However, the buyer is generally expected to make their own enquiries about the physical condition of the property. In practice, NSW residential contracts are usually prepared on the basis that the buyer has inspected the property, and special conditions often state that the property is sold in its present condition.

NSW Government guidance recommends a written building inspection report and, separately, a pest inspection report, especially where termites are a known problem in the area. A building report may identify visible damage caused by termites, but it will not normally tell you whether termites or other timber pests are still active.

Key terms explained in plain English

Term	What it means
Building inspection report	A written report on the condition of a property, identifying significant defects visible at the time of inspection. It is also called a pre-purchase property inspection report or standard property report.
Timber pest inspection report	A separate report that checks for termites and other timber pests, and for damage they may have caused.
Exchange of contracts	The point at which the contract is made and becomes legally binding, subject to any cooling-off rights. The deposit is usually paid at exchange.
Cooling-off period	A short period after exchange during which a buyer of residential property can cancel the contract, at a cost.
Rescind	To cancel the contract. During cooling-off, this must be done by written notice.
Section 66W certificate	A certificate from the buyer’s own solicitor or licensed conveyancer (not acting for the vendor). Given at or before exchange, it removes the cooling-off period. It is also needed if the cooling-off period is shortened.
Special condition	An extra term added to the standard contract, for example a term about repairs or inspections.
Special-purpose property report	A broader report that may include cost estimates for major problems, minor defects and recommended repairs.
Strata inspection report	A review of the owners corporation’s records, such as meeting minutes, levies, repairs and disputes. It is often called a strata search.

When should you get the inspection done?

The right time depends on how the property is being sold. The table below summarises the position under the Conveyancing Act 1919 (NSW).

How you are buying	Cooling-off period?	Practical timing for inspections
Private sale (private treaty), standard exchange	Yes. It ends at 5pm on the fifth business day after the day of exchange (s 66S).	Before exchange if possible. Otherwise, book the inspector immediately after exchange.
Private sale where a section 66W certificate is given at or before exchange	No (s 66T(a)).	Complete and review inspections before exchange.
Auction	No (s 66T(b)).	Complete and review inspections before auction day.
Contract signed on auction day after the property is passed in	No (s 66T(c)).	Complete and review inspections before signing.
Contract formed by exercising an option	No cooling-off period for the resulting contract (s 66T(d)). Separate rules apply to the option itself.	Obtain advice before granting or taking an option.
Off-the-plan contract	Yes. It ends at 5pm on the tenth business day after the day of exchange (s 66S).	The building may not be finished, so a standard pre-purchase inspection may not be possible. Obtain advice on the contract terms.

The vendor can extend the cooling-off period in writing. It can also be shortened by agreement, but a shortened period only takes effect once the buyer gives a section 66W certificate (s 66S(4) and (5)). A vendor does not have to agree to extend the period.

What the law says

The following provisions are the main black-letter law relevant to building and pest inspections when buying residential property in NSW.

Law	What it provides
Conveyancing Act 1919 (NSW), s 66S	Every contract for the sale of residential property has a cooling-off period unless an exception applies. It ends at 5pm on the fifth business day after the contract is made (tenth business day for off-the-plan contracts).
Conveyancing Act 1919 (NSW), s 66T	There is no cooling-off period if a section 66W certificate is given at or before the time the contract is made, the property is sold at public auction, the contract is made on the same day the property was passed in at auction, or the contract results from exercising an option.
Conveyancing Act 1919 (NSW), s 66U	The buyer may rescind by written notice. The notice must be signed by the buyer (or each buyer) or their solicitor, served on the vendor, the vendor’s solicitor or the vendor’s agent, and served during the cooling-off period.
Conveyancing Act 1919 (NSW), s 66V	If the buyer validly rescinds during cooling-off, the contract is treated as cancelled from the start and the buyer forfeits 0.25% of the purchase price to the vendor.
Conveyancing Act 1919 (NSW), s 66W	Sets out the requirements for the certificate given by the buyer’s own solicitor or licensed conveyancer to waive or shorten the cooling-off period.
Property and Stock Agents Regulation 2022 (NSW), cl 37	The selling agent must keep a written record of building, pest and strata reports it is aware of. NSW Government guidance states that when a prospective buyer asks for a copy of the contract, the agent must disclose the information recorded about those reports.
Australian Consumer Law, s 60 (Competition and Consumer Act 2010 (Cth), Sch 2)	Services supplied to a consumer must be rendered with due care and skill. This may be relevant if a pre-purchase report was prepared carelessly.
Limitation Act 1969 (NSW), s 14	Most claims in contract or tort must be started within six years from when the cause of action accrues. When a claim accrues can be complex, so time limits may apply sooner than you expect.

Step by step: how to use inspections to protect yourself

Get the contract early. Ask the agent for the contract as soon as you are interested and send it to your solicitor or conveyancer for review.
Ask about existing reports. When you request the contract, the agent must tell you about building, pest and strata reports it has recorded, including who prepared them and whether the author has professional indemnity insurance. You may be able to buy a copy.
Choose an independent inspector. NSW Government guidance recommends a suitably qualified person such as a licensed builder, surveyor or architect, with adequate professional indemnity insurance. Where the person holds an NSW licence, you can check it on Verify NSW.
Tell the inspector what matters to you. You can ask for particular areas or items to be checked, such as visible signs of asbestos, an operable electrical safety switch and smoke alarms. For a unit, ask whether common property will be covered.
Read the whole report. Pay close attention to the areas that were not inspected, the reasons why, and any recommendation for further specialist investigation.
Get advice on your options. Discuss the findings with your solicitor before you exchange, or well before the cooling-off period ends.
Act within time. If you decide to withdraw during cooling-off, the rescission notice must be in writing, correctly signed and served before 5pm on the last day. Your solicitor would usually prepare and serve it.
Inspect again before settlement. NSW Government guidance suggests a final inspection on the morning of settlement to check the property is in the same condition as when contracts were exchanged.

What does a building report cover, and what does it usually leave out?

According to NSW Government guidance, a building inspection report identifies major problems visible at the time of inspection. It is not a certificate of compliance, a warranty or an insurance policy.

Usually checked (accessible areas)	Usually not included unless you arrange it
Interior and exterior of the building	Areas that were not or could not be inspected
Roof space, roof exterior and under-floor space	Termite detection (get a separate pest report)
Garage, carport, garden shed, separate laundry or toilet	Estimates of repair costs and minor defects (available in a special-purpose report)
Small non-structural retaining walls, steps and fencing	Electrical wiring, plumbing, drainage and gasfitting
Surface water drainage, stormwater run-off, paths and driveways	Swimming pools and pool equipment, air conditioning, fireplaces and chimneys
Items you specifically request, such as visible asbestos or smoke alarms	Footings, concealed damp-proofing and appliances

Some problems are hard to detect in certain weather, and some may have been covered up. A report that does not mention a problem does not mean the problem does not exist.

Is the vendor’s pre-sale report enough?

Some vendors commission a building and pest report before listing and make it available to buyers. NSW Government guidance states that this can help but is not a substitute for your own independent report.

Before relying on a vendor’s report, it is worth checking who commissioned it, the date of the inspection, whether the author holds professional indemnity insurance, whether the report is available for re-purchase in your name, and whether its terms allow a buyer to rely on it. If you later need to make a claim about a report, your rights may depend on who engaged the inspector and on the terms of that engagement.

What can you do if the report finds problems?

Option	How it works	Things to watch
Negotiate the price	Use the report to ask for a lower price before exchange.	The vendor does not have to agree.
Ask the vendor to carry out repairs	Your solicitor can propose a special condition requiring specified work to be completed before settlement.	The work and standard should be clearly defined. For work over $5,000, the builder or tradesperson must be licensed and provide a written contract.
Get specialist advice	A structural engineer, licensed electrician, licensed asbestos assessor or other specialist can assess a specific issue.	Allow time. Specialists may not be available at short notice.
Withdraw during cooling-off	Serve a written rescission notice before 5pm on the last day of the cooling-off period.	You forfeit 0.25% of the purchase price. The deadline is strict.
Decide not to exchange	Before exchange, the agreement is usually not binding on either party.	You generally cannot recover the cost of the report.
Proceed anyway	Buy with a clear understanding of the likely repairs.	Budget for repairs and check any effect on your insurance and finance.

Buying a unit or townhouse in Hornsby or Waitara: strata considerations

Many buyers around Hornsby and Waitara purchase units or townhouses in strata schemes. With strata and company title properties, a building inspector will normally only assess the interior and immediate exterior of the unit. If you want common property inspected, you need to request a special-purpose report.

A strata inspection report looks at the owners corporation’s records. Under section 182 of the Strata Schemes Management Act 2015 (NSW), an owner, mortgagee or covenant chargee of a lot, or a person authorised by one of them, can ask to inspect those records. In practice, a prospective buyer usually arranges a strata search with the vendor’s written authority. The records may reveal building defects, planned major works, disputes and levy issues that a building inspection of a single unit would not show.

What other checks might you need?

Loose-fill asbestos insulation cannot be identified by sight, and a building inspection report will not confirm whether it is present. NSW Government guidance states the only way to confirm it is testing by a licensed asbestos assessor.

If the property has a swimming pool, check that it is fenced and meets requirements. Unless the vendor agrees to fix any issues and obtain a compliance certificate before settlement, a non-compliant pool becomes the buyer’s responsibility, typically within 90 days of settlement.

An electrical inspection by a licensed electrician may be worth considering if the building report does not cover wiring, particularly for older homes.

Parts of Hornsby Shire, including areas around Berowra, Asquith and Pennant Hills, adjoin bushland. If the property is near bushland, ask your pest inspector whether there are risk factors specific to that property and what ongoing protection they recommend.

What if you discover defects after settlement?

Your options depend on the facts, the terms of your contract and the terms of any report you relied on. In some cases, there may be a claim against an inspector whose report was prepared without due care and skill. In other cases, there may be rights where someone made a false or misleading statement about the property. Many reports contain limitations and exclusions, so a problem that was outside the scope of the inspection may not give rise to a claim.

Time limits may apply. Keep the report, your engagement terms, invoices, photos and all correspondence, and avoid removing evidence of the defect before getting advice.

Documents to prepare for your consultation

The contract for sale, including special conditions and attached documents
The agent’s advertising and any written statements made about the property
Any existing building, pest or strata reports, and the agent’s record of reports
Your own inspection reports, with the inspector’s terms of engagement and invoice
Photos and notes from your open inspections
Key dates, such as the auction date, proposed exchange date and finance approval status
For a unit or townhouse, the strata inspection report and any meeting minutes or levy information you have
Any swimming pool certificate supplied with the contract

What not to do

Do not exchange contracts, or sign a section 66W certificate, before your inspection report is back and reviewed.
Do not bid at auction without completing your inspections first.
Do not rely on verbal assurances from the agent or vendor about the condition of the property.
Do not treat a vendor’s pre-sale report as independent advice to you.
Do not wait until late in the cooling-off period to book an inspector.
Do not prepare or serve a rescission notice yourself without checking it is signed and served correctly.
Do not rely on the agent or on verbal agreements to change the contract. Ask your solicitor or conveyancer to negotiate and document any change, such as a repair condition, with the vendor’s representative.

Common myths and mistakes

Myth	The position in NSW
The cooling-off period always applies.	It does not apply at auction, on the same day after a property is passed in, where a section 66W certificate is given, or where the contract results from exercising an option.
I can withdraw for free during cooling-off.	You forfeit 0.25% of the purchase price.
A clean report means there are no defects.	Reports are visual, limited to accessible areas and reflect conditions on the day of inspection.
The building report covers termites.	A building report does not normally include termite detection. A separate pest report is recommended.
The agent can add a building and pest condition to the contract.	A real estate agent cannot change the contract. Your solicitor or conveyancer negotiates changes with the vendor’s representative.
A unit inspection covers the whole building.	It usually covers only the unit. Common property needs a special-purpose report, and strata records need a separate search.

Frequently asked questions

Can I get a building and pest inspection after exchange?

Yes, if a cooling-off period applies. The inspection must be completed and the report reviewed before 5pm on the last business day of the period. Give the inspector as much notice as possible, as the timeframe is tight.

Do I need a separate pest inspection?

It is recommended. A building report may note visible termite damage, but it will not normally confirm whether termites or other timber pests are still active.

Can I cancel the contract if the report finds termites?

It depends on timing and the contract. During the cooling-off period, you can rescind and forfeit 0.25% of the price. After cooling-off ends, your options are usually much more limited. They will depend on the terms of the contract, any statutory rights and the facts, including whether any false or misleading statement was made. Obtain legal advice before taking any step.

Who pays for the inspection?

A buyer who wants their own independent report usually arranges and pays for it. You generally cannot recover the cost if you decide not to buy.

Can I rely on a report the agent gives me?

It may be useful background, but NSW Government guidance says a vendor’s pre-sale report is not a substitute for your own independent report. Check who commissioned it, when it was prepared and whether you can rely on it.

What if the vendor will not allow an inspection?

You need the vendor’s permission to inspect, so ask early in negotiations. If access is refused or limited, speak with your solicitor about the risks before deciding whether to proceed.

Does buying at auction change anything?

Yes. There is no cooling-off period when a property is sold at auction, so you are bound when the contract is made. All inspections should be completed before auction day.

How Caspian Legal can help

Caspian Legal assists buyers in Hornsby and surrounding Upper North Shore suburbs with residential conveyancing. We cannot promise any particular outcome, but we can explain your options clearly and help you act within the relevant time limits.

In a first consultation, we can:

review the contract, special conditions and attached documents
confirm whether a cooling-off period applies and when it ends
discuss when to arrange your building, pest and strata inspections
talk through the findings of your reports and your options
explain the next steps and our fees before you proceed

Speak with a conveyancing solicitor in Hornsby

If you are about to exchange contracts, bid at auction or respond to an inspection report, it is best to get advice before taking the next step. Contact Caspian Legal to discuss your options.

Caspian Legal Pty Ltd
Suite 1, 22–28 Edgeworth David Avenue, Hornsby NSW 2077
Phone: 02 7264 3200
Website: caspianlegal.com.au
If we have assisted you, you are welcome to leave a Google review at g.page/r/CYig8LJ260Y7EB0/review.

Reviewer and disclaimer

Reviewed by Ryan Lasaki, Principal Solicitor, Caspian Legal.

Last updated: September 2026.

This article is general information only and is not legal advice. It reflects NSW law and NSW Government guidance as at the date above, which may change. Your rights and obligations depend on your circumstances and the terms of your contract. You should obtain legal advice about your situation before acting.

Sources

Conveyancing Act 1919 (NSW), s 66S: Cooling off period (legislation, AustLII)
Conveyancing Act 1919 (NSW), s 66T: No cooling off period in certain cases (legislation, AustLII)
Conveyancing Act 1919 (NSW), s 66U: Cooling off rights (legislation, AustLII)
Conveyancing Act 1919 (NSW), s 66V: Consequences of rescission (legislation, AustLII)
Conveyancing Act 1919 (NSW), s 66W: Certificate (legislation, AustLII)
Property and Stock Agents Regulation 2022 (NSW), cl 37 (legislation, NSW Legislation)
Strata Schemes Management Act 2015 (NSW), s 182 (legislation, AustLII)
Competition and Consumer Act 2010 (Cth), Schedule 2 (Australian Consumer Law), s 60 (legislation, Federal Register of Legislation)
Limitation Act 1969 (NSW), s 14 (legislation, NSW Legislation)
NSW Government, Pre-purchase inspection reports for buyers (official government guidance)
NSW Government, Contracts and deposits when buying property in NSW (official government guidance, NSW Fair Trading)
NSW Government, Pre-purchase inspection reports (agent obligations) (official government guidance)
NSW Government, Loose-fill asbestos insulation (official government guidance)
Verify NSW, Contractor and tradespeople licence check (official government service)
NSW Swimming Pool Register (official government service)