Buying a property is one of the biggest financial decisions most people will make, but the excitement of finding your perfect place can sometimes lead buyers to overlook critical details. That’s where due diligence comes in.
Due diligence is a comprehensive investigation of a property before finalising the purchase. It’s your safety net, designed to uncover hidden issues, assess the true value and make sure you’re aware of any legal or financial liabilities. Skipping this process can lead to unexpected and costly problems down the track.
Here are the key things every buyer should include when conducting due diligence on a residential property in New South Wales.
1. Review the contract of sale
The contract of sale outlines the terms of the purchase. Before you sign anything, have an experienced property solicitor or conveyancer review the document thoroughly. They will scrutinise all terms and conditions, settlement periods and inclusions or exclusions (what fixtures and fittings are part of the sale).
They will check for clauses that may disadvantage you, ensure the contract reflects what has been agreed and explain any risks. If necessary, they can request amendments before the exchange.
2. Conduct building and pest inspections
A building and pest inspection is essential for identifying structural issues, safety concerns and hidden problems such as termites or water damage. Don’t rely solely on a visual inspection. Rather, use a professional building inspector to assess the property’s condition and provide a detailed report on issues such as cracked foundations, asbestos, termite damage or faulty electrical systems.
These inspections can save you from unexpected repair costs or give you grounds to renegotiate the purchase price.
3. Check zoning and planning controls
Zoning determines how the land can be used and what can be built on it. Local planning controls may restrict renovations, extensions, building height or additions such as secondary dwellings.
Your solicitor or conveyancer should review the zoning certificate (Section 10.7 certificate) and check for:
- heritage restrictions
- flood or bushfire risk
- easements or rights of way
- nearby developments that may affect amenity
- future zoning changes proposed by council
4. Investigate strata reports (for units and townhouses)
If you’re buying a strata property, get a strata report that includes minutes from recent meetings, financial statements and details of any planned works or special levies.
This will help you understand the building’s financial health and whether any major expenses are on the horizon.
5. Confirm any outstanding financial liabilities
It is essential to confirm that all financial obligations related to the property are up to date. Your conveyancer will conduct searches to ensure there are no outstanding debts that could transfer to you, such as:
- Unpaid council rates
- Outstanding water and sewerage charges
- Land tax liabilities
6. Verify compliance with NSW legislation
If the property has recently been renovated or extended, ensure all work was completed with proper council approval. Unauthorised building work can create legal complications and may require expensive fixes.
Some common issues include:
- Swimming pools without valid registration certificates
- Unapproved structures, such as decks or garages
- Recent renovations lacking occupation certificates or final inspection approvals
Get expert legal advice before you buy
Conducting comprehensive due diligence protects you from costly mistakes and gives you confidence in your property purchase. At Outwest Legal, our team can guide you through every step of the due diligence process, from reviewing contracts to coordinating inspections.
If you’re planning to buy a home and want confidence in your due diligence, contact Outwest Legal. Book a consultation with one of our property law professionals before signing a contract.
