Building inspection tips: How to choose the right building consultant

Building consultants require a licence to carry out pre-purchase inspections on residential homes in NSW. Ask to see a building consultancy licence before contracting someone to perform your pre-purchase inspection.

You can check their consultancy licence online by going to the online licence check facility at fairtrading’s web site address.

http://www.fairtrading.nsw.gov.au/About_us/Online_services/Home_building_licence_check.html

Questions to ask a consultant

If possible, you should get at least three quotes for the inspection and report. Here are some questions you should consider asking the consultant or organization that provides the best quote.

What are your qualifications and experience?
What is your licence number?
How long have you been doing building inspections?
Do you have current insurance cover for:
1. professional indemnity
2. public risk
3. death or injury of any employees
Who is the insurer?
Are you a member of an industry association? If yes, do you follow their Code of Conduct?
Do you have any set procedures for handling disputes or complaints?
Can you give me references or contact details of three clients with similar properties?
What will the report cover and what format do you use?
Can I look at a sample of the report?
How long before I can have the completed report?
Can you call me with a verbal report on the day of the inspection? Will this cost any extra?
Do you follow the Australian Standard AS 4349.1 for the inspection?
Are you independent of the vendor or their agent?

Information you need to give the consultant

You should give the consultant the following information:

the address of the property
the name and contact details of the owner or real estate agent
a brief description of the property including the number of rooms, construction type, age and size etc.
details about particular parts of the property you want inspected.

It’s important that you arrange for the consultant to have reasonable access to the property. To do this you will need the permission of the vendor or their agent.

The cost

The price charged for a building inspection report will vary depending on the type of property, the report format (particularly the amount of detail), the period of time spent on the inspection of the property and the period of notice given to the consultant. Indications from industry sources are that the minimum price of a simple, basic report on a standard residential dwelling would be around $450 to 500. Detailed reports would normally cost more. As previously stated it is recommended that you obtain a minimum of three quotes.

How long does an inspection take?

Most consultants will need a minimum of 1-2 days notice to do a building inspection.

When ordering your building inspection report, make sure you give yourself enough time to make a decision. You should get the vendor’s permission to have the property inspected as early in the sale negotiations as possible. This will help you decide if the property is worth buying. There may be little point in spending money on conveyancing until you know the condition of the property.

Inspections done during the cooling-off period

When you buy a property in NSW there is a five-business-day cooling-off period after you exchange contracts. During this period, you have the option to get out of the contract as long as you give written notice. The cooling-off period starts as soon as you exchange and ends at 5 pm on the fifth business day.

A cooling-off period does not apply if you buy a property at auction or exchange contracts on the same day as the auction after it is passed in.

You can waive the cooling-off period by giving the vendor a ‘66W Certificate’. This is a certificate that complies with Section 66W of the Conveyancing Act 1919.

If you use your cooling-off rights and withdraw from the contract during the five-business-day period, you will have to pay the vendor 0.25% of the purchase price. This works out to be $250 for every $100,000.

If you want to get a building inspection done during the cooling-off period, make sure you give the consultant as much notice as possible. They will have to do the inspection, prepare the report and still give you time to make a decision. If you decide not to buy the property you will also need time to get a letter to the vendor or their agent, saying that you are withdrawing from the contract.

Other types of reports

Special-purpose property reports

A special-purpose property report would normally cover the same items as a building inspection (pre-purchase property inspection) report but it may also include:

an estimate of the cost of fixing major problems
a list of minor problems
a recommendation of the repairs and maintenance work needed.

Check with the building consultant on what information they normally include in their pre-purchase property inspection reports and inform the consultant if you require additional information.

Pest inspection reports

While the building inspection report should identify any visual damage caused by termite activity, it won’t include the detection of termites and other timber destroying pests.

If the property is located in an area where termites are known to be a problem, you should consider getting a pest inspection done as well as the building inspection

Pre-sale (vendor) building reports

Vendors will sometimes get a building report on the property they are selling so they can give it to interested buyers. While this can be helpful, it is better from your point of view to get your own independent report.

How are you protected if problems are not found?

If you can show that the consultant was negligent in doing the inspection, you can take legal action against them.

It is therefore strongly recommended that you only use consultants that have adequate insurance cover, particularly for professional indemnity

Who to contact if you’re not satisfied with the report

If you are dissatisfied with any aspect of the building inspection report or your dealings with a consultant you should first try and resolve the problem with them or their company. If they are members of an industry association you may be able to get help from that association to resolve the dispute.

If you buy the property and later find that there are problems that weren’t identified in the building inspection report, you may need to seek legal advice about your position, particularly if the consultant’s negligence ends up costing you a lot of money.

You can also call one of our Fair Trading Centres for advice and assistance.

Fixing the problems

If you end up buying the property you may need to organise repairs or renovations before you move in. If this is the case, there are some important things you should know. When using a builder or tradesperson for work where the labour component is over $200 the builder or tradesperson must:

be correctly licensed with the Office of Fair Trading for the work they are doing
provide you with a written contract where the value of work (labour and materials) is over $1,000
give you a certificate of home warranty insurance before taking any deposit and before starting the work if the job costs more than $12,000.

Effective Building and Consultancy is the leader in building and pest inspections around Sydney, get in touch or learn more about us.