When purchasing a property, buyers often focus on the standard building and pest inspection. However, these inspections have limitations and may not cover all potential issues. Adding a Due Diligence special condition to your purchase contract allows for a more thorough investigation of the property before finalising the sale.
What is a Due Diligence Special Condition?
A Due Diligence special condition is an added clause in a purchase contract that gives buyers the right to conduct additional searches and inspections beyond what is typically covered in a standard contract. This clause provides buyers with extra time to investigate the property’s condition, legal status, and potential risks before committing to the purchase.
Why is Due Diligence Important?
The standard building and pest inspection usually covers structural integrity and pest infestations. However, it may not include:
Electrical inspections – Checking for faulty wiring, outdated switchboards, or compliance with current safety standards.
Plumbing inspections – Assessing pipe conditions, water pressure, drainage issues, or hidden leaks.
Council searches – Ensuring there are no unapproved structures, zoning issues, or outstanding council notices.
Flood and environmental checks – Identifying potential flooding risks or contamination issues.
Title and easement searches – Confirming ownership details and any restrictions on property use.
Including a Due Diligence clause gives buyers time to complete these extra checks without being locked into a contract prematurely.
Key Benefits of a Due Diligence Clause
More Thorough Property Checks – Avoid costly surprises by uncovering hidden issues before settlement.
Flexibility to Withdraw – If serious issues arise, the buyer may have the ability to renegotiate or withdraw from the purchase.
Better Negotiation Power – Identifying issues early may give buyers leverage to negotiate a lower price or request repairs.
 Peace of Mind – Confirms that the property meets expectations, legally and structurally.
How to Add a Due Diligence Special Condition to Your Contract
Due Diligence conditions are not automatically included in standard property contracts. Buyers should:
Consult a property lawyer – A legal professional can draft a customised Due Diligence clause to suit your specific needs.
Clarify the timeframe – The clause should specify how long the buyer has to conduct investigations (e.g., 14–21 days).
Outline the scope – Detail what inspections and searches the buyer intends to carry out.
Understand exit options – If issues are found, the contract should allow the buyer to withdraw or renegotiate.
A Due Diligence special condition provides buyers with added protection, flexibility, and confidence when purchasing a property. While standard building and pest inspections are valuable, they don’t cover everything. Adding this condition ensures that buyers can properly investigate the property before committing to one of the biggest financial decisions of their lives.
At Reid Legal Group, we help buyers navigate property contracts and include the right clauses to protect their interests. If you’re looking to buy a property and want to ensure a secure and informed purchase, contact us today.