Home-buyers warned over building reports
Sat, 01 Sep 2012 6:23p.m.
By Susie Nordqvist
Kiwis are being warned to do their homework on building inspectors.
Alarming new figures suggest thousands of homeowners are purchasing substandard pre-purchase building reports.
When Karen Goodger and her husband put an offer in on a property in Wellington, they did so to secure their children's future.
“We looked at several properties [in Wellington],” says homeowner Ms Goodger. “It was the only one that ticked the boxes for us. My only concern was the era.”
That era was the early 2000s, when the extent of the leaky homes problem nationally was becoming clear. So they made their offer subject to a building inspection.
“I looked at this company. They did tests for moisture levels and everything so I thought that would be sufficient.”
But the building inspector failed to pick up that the property was in fact a leaky home.
“We were facing financial ruin as a result of this. It felt a bit like we were on a runaway train heading over a cliff and no way of getting off this thing.”
Karen Goodger was able to get out of the sale, but a homeowners lobby group says too many building inspectors simply aren't up to the task.
“There are some very good ones, but from our experience the majority of them are lacking the competency to do the job well,” says John Gray, president of the Homeowners and Buyers Association.
It says more than 90 percent of the 6000 pre-purchase building reports it has seen in the past five years have been flawed, and that's because the industry is not controlled in any way and building inspectors don't have to be licensed.
A new clause in sale and purchase agreements states pre-purchase building reports must be carried out by a "suitably qualified person".
“I believe they should have gone further than that, to actually stipulate that it needs to be done by a professional,” says chartered surveyor Peter Harris, of Babbage Consultants.
In the meantime, the advice is to always use a registered building surveyor or chartered building surveyor and make sure the inspector has indemnity insurance to cover legal costs and damages if things do go wrong.
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3/09/2012 8:37:41 a.m.
The clauses on the reports do not stand up in a court of law. You are unable to add clauses to contract out of the Consumer Guarentees and Fair Trading Act, so while they may have put in every clause under the sun they are worthless. Take them to Court.Also reports done for a third party (eg a home onwer) are not liable to the third party relying on it, only to the person who comissioned the report.
2/09/2012 9:04:15 a.m.
We had one that mentioned features the house didn't even have - suffice to say that fraud didn't get paid.
2/09/2012 8:11:10 a.m.
New Zealand has gone too far down the deregulation route. It was deregulation that was at the root of the leaky building situation and got the country into this mess, failing many tens-of-thousands of home-owners. Now these so-called *Building Inspectors* aren't even up to the task of inspecting buildings, letting down even more people.
We were told that *market forces* would assure building quality. They didn't. It would seem that whenever a situation is left to market forces, human greed runs rampant, corners get cut, and a few make out like bandits while everyone else is left to pay the price.
Free-market fundamentalism cares not for human suffering. This country needs more regulation, not less.
1/09/2012 9:00:40 p.m.
Also be aware of reports already compiled by the owner or realestate agent as these could be done by an 'preferred inspector' that does favourable reports for the agents.
1/09/2012 8:58:02 p.m.
we have two friends who in the last year undertook prepurchased inspections with a supposedly professional inspectors. Te first one got us in to do some construction work to find several places in the house had rotten floors complete with rotten beams and posts. This has cost thousands to repair and the inspectors report has 'no responsibility' in clear print on the report. The other friend nearly boaught a house until they got us in to check out the house. The report was a stock standard letter that was so general it didn't mean anything and did not warn of any of the flaws in the house that we picked up on. Buyer be very aware.
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