The alarming truth about building / strata inspectors

8 Feb

Assume Building / Strata inspectors are licenced and/or qualified? Think again.

I completely understand why most buyers assume that the person doing the building/pest and strata inspections would have formal qualifications or a licence. In our regulated society you would expect as much from someone providing information about your largest financial purchase.

Sadly, this could not be further from the reality.

A building and/or pest inspector does not:

Need to be a licenced builder
Need to have ever worked as a builder
Need to know anything about how homes are built

It is the same story for strata inspectors.

There is no regulator. No licencing requirement. No continuing professional development. No minimum standard.

This is incredibly scary.

All that they require is:

An ABN number (these are free and obtained in about 5 minutes)
A way of finding clients to pay for their service (maybe a website and/or a good relationship with a real estate agent).

You would hope (but never assume), they hold insurance.

As a buyer, do not assume that the person who has compiled the report knows more about the building/strata than you do.

That said, a lot of inspectors have been around for several years and are excellent at what they do. It is just important you find yourself reading a report prepared by a professional, rather than someone who just switched careers yesterday.

But wait, there’s more... issues!

Going back five years or so, every prospective buyer of a property had to pay a full $300 - $400 for a report. This can quickly add up if you miss out on half a dozen properties.

The process has shifted now, where 90% of the time the owner/selling agent will commission the initial report. Each prospective purchaser then only pays $30 - $60 upfront for the report. The successful purchaser is then charged the remaining fee.

This is a great outcome for buyers, as it makes more information more accessible. A BUT is coming though!

Building/pest reports are subjective to some degree.

The degree to which something is an issue in a property is subjective. If an inspector relies on consistent work from the selling agent and is being commissioned by the selling agent - there is a slight conflict of interest here.

This is less of an issue for strata reports as these contain facts about the building records. E.g. Current financial statements, meeting minutes, and insurance details. Facts are not subjective. Remember though - the person compiling the fact base may have zero training about what to look for and where they should be probing for further information.

As a buyer, you can always choose your own professional, and commission your own report of a property.