In 2009, the building inspection industry took a backward step because of a law that quietly deregulated the industry in NSW.

This change allowed almost anyone without an adequate understanding of the laws and regulations to start a building inspection business. For the property owner, who may not be aware of this fact, it left them open to financial loss if an inspector missed defects of a property due to lack of knowledge.

Under AS:4349.0-2007 & AS:4349.1-2007 & AS:4349.3-2010 there is currently no Australian Standard requirement for a pre-purchase pest and/or building inspector to have professional indemnity (PI) insurance in place, furthering the risk to the property owner.

Building inspectors must be able to comply with the Standards of the industry including:

  • Australian Standards for building inspectors
  • Spotting defects
  • Report writing
  • Contracts and fee agreements
  • Avoiding disputes

The AS 4349 Series is the workbook that every building inspector should have on them at all times, as failure to comply with the guidelines set out in these standards can result in severe legal penalties. If defects are not noticed, this could mean depreciation in the value of the property owner’s home and cause the owner to enter into litigation with the building inspector.

Correct report writing is another aspect of training for building inspectors, which helps them to understand how to create reports, file them according to the Australian Standards and collate all evidence, including photos and diagrams. Likewise, if the building inspection business employs staff that write reports, they too will need a thorough understanding of the laws.

The risk of litigation is high in property inspections, as the industry centres on the greatest investment that a person can make – the home. When things go wrong, it is the inspectors – those who give the green or red light for a property – who are often in the line of fire.

It’s incredible to think that an industry so full of risk is not regulated.