Here’s an unfortunate fact: in Australia, only one state requires a pre-purchase building inspector to be licensed and that is Queensland. In every other Australian State, almost anyone can set themselves up as a pre-purchase building inspector.
You don’t have to be a genius to figure out how things could go wrong having an unregulated industry such as the building inspection industry. The unfortunate part about it is that many home buyers are unaware that their pre-purchase building inspector may not be properly trained or have the credentials to spot serious defects. The potential for massive financial loss would eventually fall on the purchaser if they received a report from an inspector who has not picked up defects.
The risks of building inspectors not having professional indemnity insurance are obvious. Now it goes without question that property buyers need to ask an inspector if they are insured. At least if the inspector fails to find a costly fault, both the inspector and purchaser will be covered. With over 40 per cent of property pre-purchase reports ending up in a dispute, this is something to consider very seriously.
The majority of building inspectors will have a builder’s trade, but it’s not a necessity in setting up a pre-purchase inspection business, and in NSW having a building inspection license was abolished by the state government in 2009, which is ludicrous! Despite continuing lobbying for this to change it remains the same and is falling on deaf ears.
To do the job properly, a qualified building inspector will have extensive knowledge of the Building Code of Australia, the Building Act, the Building Regulations and various Australian Standards in the construction industry, and will have come from a building trade background. Without this knowledge how could anyone even consider trusting someone to inspect the purchase of a home? Unfortunately it does happen and many litigation cases result.
Pre-purchase inspectors need to understand all building trades, from gyprocking to tiling, roofing and even landscaping. They also need to be able to back up and stand by their reports should a conflict come up about the report, even if the vendor or real estate agent tries to persuade them otherwise or it goes to court.
Vendors and purchasers should also take into account that some inspectors specialise in certain areas such as mould or asbestos; inspections in these areas are highly specialised and requires protective clothing and equipment.
Inspectors need to document every detail and be able to back it up in a court – many an inspector has been sued for something not detailed properly.
Here are a few warning signs for property buyers to be aware of when looking to engage a pre-purchase inspector:
- Research the internet for any bad feedback, including the inspector’s own website for positive feedback
- Visit your state government website and do a license check
- The pre-purchase industry does not have any regulated or standard fees; rule of thumb is the cheaper the report the less inspection/reporting is carried out. The minimum report should be at $400 to maximum $1,000 depending on the experience of the inspector and size of the property
- Stay away from reports already to purchase; it is better to hire your own independent inspector