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Paying to view a completed building inspection??

Discussion in 'The Buying & Selling Process' started by legallyblonde, 7th Jul, 2015.

  1. legallyblonde

    legallyblonde Well-Known Member

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    I felt the need to share what I just read in an add... I am not interested in the property... I merely find it bizarre!

    "Just requiring cosmetic refurbishment, an independent building inspection report has already been conducted and is available for download on the Jim's Building Inspections Website for $240.00."

    This seems incredibly odd.. I would assume if an owner has commissioned a report... They can make it freely available? Isn't $240 the standard cost of a building report? Are the owners trying to recoup the cost? IS THIS NORMAL?? o_O
     
  2. Perp

    Perp Well-Known Member

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    The owners would have paid much more than the $240, I imagine. No, they're not trying to recoup the cost; it's the amount that Jim's charge for having to take on a duty of care to additional people. I've heard of this before.
     
  3. rhinsor

    rhinsor Well-Known Member

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    Wouldn't the agent have a copy they can show people for free. I would get my own report anyways
     
  4. Perp

    Perp Well-Known Member

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    You don't own the IP in the building inspection report. You can't just make copies and show them to anybody.
     
  5. legallyblonde

    legallyblonde Well-Known Member

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    That is the only explanation I could think of! Seems like a decent money making business ;)

    I agree... I would get my own report done!
     
  6. Propertunity

    Propertunity Exclusive Real Estate Buyers Agent Business Member

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    What some building and pest report companies, and strata search companies in the case of units, (especially in Sydney) is take the risk upon themselves to do a report (not commissioned by the vendors or the selling agent) in the hope they can sell the report to interested parties.

    Neither the vendor nor the agent get to see the report (unless they pay) but the agent does get advised who downloads the report as a 'payback' for advertising the availability of the report.

    Some companies offer a partial refund if you have downloaded the report but are not the successful purchaser.
     
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  7. bythebay

    bythebay Well-Known Member

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    theres no contract between you and the builder
    The contract is between owner and builder coz owner paid for report
    If you pay a view fee and rely on this report and makes purchase and it later turns out the builder was negligent in missing important issues eg structural problems which would have deterred you from buying, you have no recourse

    could be a moot issue ... As the disclaimers in building reports these days are longer than the findings ...
     
  8. King

    King Active Member

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    it would cost more to do the initial B&P report but for $240 you are purchasing an additional copy of the report. Try asking them to do a B&P for your house and ill say it would be more than $240.
     
  9. wylie

    wylie Moderator Staff Member

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    Without seeing the paperwork involved, or what you need to sign to purchase the copy, I would suggest that if you do so, you would have recourse... as much recourse as you would have if you purchased the building report direct. It sounds like that is what you are doing, just slightly differently structured.

    I never understand people who think that using a building report done for the vendor or for someone else will be skewed and somehow not as good as one paid for by the potential purchaser. These are done by professional builders, who have no interest in making things up, ignoring things or covering things up.

    We had one done for our most recent house sale, paid for by us as vendors. The downside for me was that having the report available for potential purchasers to see meant we had no idea who was keen enough on the house to get a building report. It was going to auction, so that is a good indicator that someone is keen. We ended up selling prior to auction, so it didn't matter in the end.

    I believe NSW vendors get a report done prior to sale, but maybe that is not compulsory?

    Do people really think a building inspector is going to risk his career and his reputation by "doing a dodgy" and making the report favourable to the vendor? Really?
     
  10. Perp

    Perp Well-Known Member

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    The caselaw goes against this, actually. If the building report says "Prepared for Vendor" (as it will), and it's wrong, and purchaser relied on it, purchaser will have zero comeback.

    When you pay for the report, you're paying for the exact same thing to be provided saying "Prepared for Purchaser", and then the preparer of the report does owe the purchaser a duty of care.

    (There are usually so many disclaimers and exclusions as to raise the question of whether there's recourse in any case, but that's a whole different issue. :rolleyes: It's probably worthwhile having recourse for huge issues, e.g. If report says "structurally sound" and it turns out the house is about to fall out and any building inspector should have detected that.)
     
  11. wylie

    wylie Moderator Staff Member

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    Interesting... I wonder just how the report is worded. It seems it is not prepared for the vendor or the agent or the purchaser (reading the original post), but clearly the vendor needs to allow access.

    To legallyblonde, it would be good if you could put the listing details here and then someone (maybe even me) could call the agent and ask about this. If this is something the building inspection service wants to take off, then they would either have to cover the "who's liable" issue or it will never fly.

    And following your comment Perp, does that mean the report we had prepared as vendor would mean that if the purchaser who relied on the report in their decision to buy, and then finds something major was missed has no recourse, because we as vendor paid for the report?

    (Mind you, I've NEVER read a clean report, and they cover their butts pretty well with so many pages full of disclaimers that it would be interesting to know how many challenges are successful.)
     
  12. wylie

    wylie Moderator Staff Member

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    Also, friends just had a sale crashed due to an 83 page building report. Vendors found a house they liked better and used the report to weasel out. I had to laugh when (like our own report many years ago) the building inspector raised the issue of the cubby house not being built to code.
     
  13. Propertunity

    Propertunity Exclusive Real Estate Buyers Agent Business Member

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    I don't doubt you Tracy but I'm wondering how then they manage to get it done in the ACT where for a number of years now, the vendor pays for the report prior to listing for sale?
    Maybe someone who knows from Canberra can shed some light?
     
  14. citystar

    citystar Well-Known Member

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    I have seen this occurring more often however I would always insist on organising my own building and pest inspection. For the sake of a few hundred dollars I would hate to purchase a property and discover it had issues that could cost a fortune to fix and/or in legal fees to sue the building inspector the vendor had used.
     
  15. Azazel

    Azazel Well-Known Member

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    I do find that a bit odd. I would just pay for my own. A building inspection without pest inspection shouldn't cost much more than that.
     
  16. wylie

    wylie Moderator Staff Member

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    I don't get this though. They are not going to put their livelihood and income at risk by doing the vendor a favour by sugarcoating the report. They must legally stand by their report. I do agree that there are inspectors that word the reports so they sound worse, and I know agents avoid some valuers for this reason. But what you are suggesting is that they are either incompetent and miss something big, or are happy to be influenced by a stranger (vendor) asking that they lie. I don't think they would be long in the industry if they did this.
     
  17. Perp

    Perp Well-Known Member

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    After you pay, they will add "Prepared for [Name of person who paid $240]"
    Yup.
    I'd imagine it's information that the purchaser can use to influence their decision, but is provided on a "no recourse" basis.
    The caselaw is that they have to stand by their advice to a particular person, and owe no duty to any other person. The reason is that, otherwise, for the sake of a relatively modest fee, they would owe a duty of care to a potentially infinite number of people, and that was thought to be bad public policy.

    Give me a few minutes and I'll see if I can find the relevant cases.
     
  18. Big Will

    Big Will Well-Known Member

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    When we buy a car it has a RWC which is similar to a BI. Who pays for the RWC, the current owner. Any car I have purchased (besides new) have gotten my own inspection for (RACQ/V).

    Same thing with the vendor paying for a BI, yes I could trust their one as the inspector isn't going to risk his licence to cover up something or increase his insurance each year just because he is covering up things for the vendor. However two eyes are better than one and part of my DD.
     
  19. Perp

    Perp Well-Known Member

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    OK, the relevant case is Esanda v Peat Marwick Hungerfords. This case was where PMH had audited a particular company (X). Then Esanda relied on the auditor's report to lend money to X, who promptly went broke, and the audit was possibly negligent (the matter didn't need to be decided).

    The High Court found that the auditor wasn't liable for Esanda's losses because an element of establishing liability in negligence for professional misstatement is that the provider of advice knew that the particular person (or entity) would be relying on that advice, otherwise providers of advice could be liable to an indeterminate class. As PMH didn't know that Esanda would be relying on the audit, there was no duty of care.
     
  20. Perp

    Perp Well-Known Member

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    Not the same. A RWC is particular to the car, not to a person or entity. They are provided knowing that the class of people who rely on them is "insurers and authorities and all potential purchasers", and they are regulated by statute. Totally different kettle of fish.