This post is written by Miriam Betts and Brianna Freebairn, Associates at Freebairn & Hehir who both specialise in residential conveyancing.
When purchasing a property, buyers often wonder whether they can rely on a vendor supplied building report or whether they should commission their own.
We’ve always been of the view that it is much better to commission your own report. Although this involves an additional financial outlay, the potential benefits and risk mitigation can be significant.
When issues arise with a property after settlement, purchasers will often turn to the building inspector for redress. The standard sale and purchase agreement contains limited warranties about building defects that are enforceable against the vendor. Courts are willing to agree, however, that building professionals should maintain a high standard of care in their assessments and provide accurate reports.
Holding a building inspector to that duty can be challenging when you didn’t commission the report yourself. There is no doubt that a duty of care is owed to those who paid for the report. When it is argued by a third-party, however, the inspector will probably point out that the report was not intended for you.
This doesn’t always work, of course.
You may have read about a recent High Court case where a purchaser successfully sued an inspector over a vendor supplied report. The inspector’s argument that the report was commissioned by the vendor and was provided on the basis it was not to be shared did not win the day. The court awarded the purchaser over $500,000 in damages.
This case sends a stern warning to building inspectors and others providing professional advice. It probably also provides a glimmer of hope and encouragement for purchasers who have found themselves in a leaky home or similar predicament.
Nevertheless, our view doesn’t really change. The decisions of the court are inherently uncertain and contingent on a myriad of factors. Each case is unique and influenced by specific circumstances, including the severity of the misrepresentation and the extent of the damage.
Even those with a winning case quickly discover that legal proceedings can be prolonged, financially burdensome and above all emotionally draining.
Getting your own builders report ensures that your interests as a buyer are kept at the forefront. The report will be tailored to address your specific concerns and priorities, providing a risk assessment specifically for your potential investment. The inspector owes an incontestable duty of care to you, not the vendor.
And sometimes, that can make all the difference.