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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.
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:
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. However, it is very difficult to establish at a later date what the inspector saw and/or should have probably seen at the time particularly if the inspector was only able to undertake a visual and non-invasive inspection.
There are limitations to many pre-purchase inspection reports and these must be read carefully along with any disclaimers throughout the contents of these reports, as they will limit the liability of the author making the report.
***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.