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Pre-purchase property inspections are highly desirable before you buy for essentially two reasons.

Firstly it should be a practical warning against significant defects in the property that you may not be aware of. Secondly it is strategic, to be used as a negotiating tool in the purchase. Simply, if significant defects exist, you can use the report to justify offering a much lower price. However, there are problems and misconceptions.

Customers often wrongly believe a pre-purchase report reports on everything. It does not. No property inspector is an expert at everything. For example, some inspectors say they check electrical, but how can that be if they are not licensed electricians? The same holds true for plumbing, air conditioning, structural and regulatory and title matters. So it leads to a situation where inspection will exclude (exclusions) a whole array of matters outside of an inspector’s expertise.

Some purchasers are also under the misconception is that property inspection is some form of insurance that will prevent future defects. Simply put, it’s not.

Then there are problems with inspections, often to do with access. A furnished building cannot be fully inspected - you can move a chair to have a look but if you moved a chair why didn’t you move a bedside table, bed, lounge, wardrobe, rugs, and pictures on the wall? The problem is that when you are inspecting someone’s home, you are a stranger in their home. Whether it's an owner or a tenant, you cannot turn everything upside down.

There are further access difficulties. Roof space is often obstructed by heating and air conditioning ducting, or by a low pitch line. Safety is also a concern. Do you walk on the roof of a two-storey building that has no safety rails? There are lone wolf inspectors out there that make big claims about walking on the roof but they never employed another inspector. Had they done so, they would be acutely aware of OH&S responsibilities and having a safe inspection practice for the employees. Good inspectors go as far as they can without damaging anything, and then report access restrictions.

Sub floor space may be restricted by stored goods, or it may be contaminated with pesticide or broken asbestos cement from renovations. So in addition to restrictions, there are safe access limitations. Property inspection is an inherently dangerous occupation and the inspector is alone on his own, whether walking on the roof, crawling in the roof space, or in the sub floor space.

Fortunately there is guidance in the form of AS 4349.0,4349.1 and 4349.3 that sets out the purpose of pre-purchase property inspections, exclusions, limitations and disclaimers. More importantly, it requires a pre-inspection agreement where the customer can be informed about exclusions, limitations and disclaimers and agree before proceeding with the inspection.

To summarise, a property inspection and report is an attempt to discover and report on significant issues before a client makes a decision to buy. It is not a guarantee that there are no defects that cannot be detected due to inspection limitations. Just as GP cannot see inside your chest without an X-ray or know about your blood without a blood test, the inspector cannot see everything. Of course, if there are symptoms of underlying problems, then further invasive inspections can be recommended.

The healthy way to look at a pre-purchase inspection is as a valuable tool in risk reduction in helping to make a decision whether to buy or not and or to negotiate. Notwithstanding limitations, exclusions and disclaimers, property inspections deliver the right information in the vast majority of cases.

 
  • Great article, I am a Building Inspector and this is very common discussion.

  • I find it a little curious when some one is complaining about buying an old house and finds defects; and, when you ask what he has paid for it, you find they only paid for the value of the land. Was the buyer cheated?
    Old houses have little or no value in most suburbs in Melbourne.
    Houses that are build to last for a short time like cheap cars, do just that.
    A five hundred dollar car or house are a bargain just standing still, and, not good for anything else.

    I love the honesty of auctioneers who sell the land and location, and, not the old house.

    In any case having the eyes of an experienced inspector will at least avoid the houses in the creek beds and the overhead power lines in the back yard.

  • Interesting article Branko… and spot on from the perspective of employee building consultants. But alas, this is only half of the full story.

    The other half of the story is that of what you call the lone wolf (building consultant), of which I was one. And these lone wolves, (more correctly termed Sole Traders… of which there are many), are as you say NOT bound by O. H. & S. rules (in turn exploited by insurance companies), because they do not employ other building consultants.

    Therefore they can do what employees cannot… and carefully get on and in the roof and under timber floors, gaining substantial knowledge and expertise sadly lacking in those who abide by O. H. & S rules and the pathetic Codes for building inspections AS 4349 series: which for new houses in particular, preclude access to over half of the house… so that many elements vital to the structural integrity of the house (such as tie-downs, verticality of trusses, fixings) are simply not even seen.

    In 22 VCAT cases, where I inspected after the owners knew that their previous employee building consultants had missed defects, I discovered to my shock, that these 22 different building consultants had missed an average of well over $40 000 worth of defects, plus 9 short-cut defects in each of the homes, due to the Code AS 4349 definitions of defect being so pathetic.

  • Branko I think you have nailed it. In effect, even if qualified (and the majority of consultants are neither qualified nor registered in any category of building occupations) there is so much that either consultants have no idea about (not an electrician in your example) or the defective works are hidden (don't go into roof spaces or under the house to see the foundations) that little will be 'uncovered' even if such people were competent and well meaning.

    It seems that until we have regulation and enforcement for the shonks – currently anyone can call themselves a Building Consultant – there is little value in an 'inspection'! I doubt that many prospective owners will reduce their risk even though they will pay thousands of dollars in the belief that this may have some value.

    As a first step, we need to have properly trained and qualified inspectors. As a second step, they need to be 'independent' – almost impossible in any part of the 'building' industry which is money-driven. As a third step, there needs to be QA – at present zero quality control, to the absurd point that it matters not whether you were a cook or cleaner, anyone can hang up a shingle and pretend to be an 'inspector'.

    In relation to Doctors, they actually have lengthy training and as you say recommend and receive 'independent' tests to confirm or negate their expert opinion on symptoms before forming what are evidence based, professional opinions. In building, neither of these apply – and worse there are very few experts who have a strong knowledge base, professional qualifications or the capacity to be putting forward worthwhile opinions.

    In my view, paying for an 'inspection' service from anyone without qualifications, registration, lengthy experience and who is not at least prepared/capable of 'examining' the major structural elements of the building is not going to either reduce risk for owners or be worth 'purchasing'.

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