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Posted 15 February 2021
Category: Strata, Building Defects, Conveyancing
It is extremely important for any prospective purchaser to undertake enquiries and due diligence prior to purchasing a property. Pre-purchase inspection reports are crucial to ascertain the condition of a property and can usually be commissioned at a low cost. It is frustrating for any purchaser to find out that the property they have just bought has defects present which were not noted in the pre-purchase inspection report.
It is common that you do not get what you pay for in relation to these reports. Many people ask the question whether the purchaser has any legal recourse in pursuing the author of a bad pre-purchase inspection report. Well, of course it’s dependent on the facts of the case.
THE AUSTRALIAN STANDARD 4349
The Australian Standard 4349 sets out the minimum requirements for inspection of and preparation of inspection reports on buildings and associated works by a suitably qualified inspector in order to provide advice regarding particular technical aspects of the property. The Australian Standard outlines the following requirements (this is a non-exhaustive list):
It must be noted that the Australian Standard is not mandatory and advertised compliance with the Australian Standard could further water down the standard.
A prospective purchaser must be aware that there are limitations of pre-purchase inspection reports which are usually set out in the report noted as disclaimers which should be read carefully as these usually limit the liability of the company/person preparing the report.
LEGAL RECOURSE
If a pre-purchase inspection falls short and does not report on crucial matters and you have bought the property in reliance of the pre-purchase inspection report and have suffered a loss, you may have recourse against the pre-purchase inspector, pre-purchase inspecting company and/or the author of material advertising the inclusions of the pre-purchase inspection and report (such as a website) in the following ways:
Although not heavily apparent, the following guiding principles have been established by way of case law:
VOID LIMITATION OF LIABILITY CLAUSES
Many reports will contain provisions that inappropriately seek to limit the liability of the inspector. There a number of consumer protections provided by the Consumer Law which can make various attempts by inspectors to limit their liability as void, for breach of:
KEY TAKEAWAYS
Owners are often disappointed when they discover defects at a later date that they believe should have been able to have been identified by the inspector.
Consideration of the above issues and of what the inspector saw and/or should have probably seen at the time will need to be given, particularly if the inspector was only able to undertake a visual and non-invasive inspection.
If you have been disappointed and suffered loss feel free to seek some advice from our team of defects lawyers.
***The information contained in this article is general information only and not legal advice. The currency, accuracy and completeness of this article (and its contents) should be checked by obtaining independent legal advice before you take any action or otherwise rely upon its contents in any way.
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