Building and Pest Reports: Buyer Beware!
Building and pest inspections can protect property buyers from purchasing property that may have costly hidden problems. However, a recent case* demonstrates the importance of being cautious about the trust you place in your building and pest report.
Mrs Winchester entered into a contract to purchase residential property in 2018 that was conditional on a satisfactory building and pest report .
Mrs W asked the real estate agent involved in the contract to organise the indspection. The agent contracted an organisation, APC, which then contracted Knapp to organise it.
When she received the report, Mrs W negotiated with the vendors to replace the guttering prior to settlement. However, two major defects in the roofing and flooring became apparent in the months after settlement. Mrs W argued that Knapp had a duty of care to find and report these defects and to meet Australian Standards.
The Tribunal found that:
1. There was no contract between Mrs W and Knapp to conduct the building inspection, so Mrs W had no contractual rights in this matter.
2. While Knapp was not licensed by the QBCC to provide the report, there was no evidence of causation that the breach led to a loss. But because a company that carries our unlicensed building work is prohibited by the QBCC Act from receiving monetary compensation for it, Knapp was ordered to refund Mrs W the $220 inspection fee.
3. The inspection report satisfied Australian Standards as it pertained to the Roof and Flooring. It listed limitations of advice which included lack of access to the roof space and that special purpose investigations might be required for “water leaks”.
Conclusion: Buyers must beware of contracting building and pest inspections through third parties and read all the fine print, limitations of advice and advice for further investigation. Don’t just rely on the verbal report of the inspector!
Our experienced conveyancing team can help you with your property purchase and discuss any concerns you have about building and pest inspection reports. Contact us on (07) 5391 4900 or via our website today.
*Winchester v Knapp t/as Knapp Constructions Pty Ltd  QCAT 61
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