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Possible Building and Pest Inspector Scam

Discussion in 'The Buying & Selling Process' started by hotmail, 26th Aug, 2015.

  1. hotmail

    hotmail Well-Known Member

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    Hey guys,

    I recently did a building and pest inspection via a guy who was also a property investor himself. We were having a chat about the state of the building and how poor it was and it got me thinking about some potential conflicts of interest which could arise from such an arrangement.

    For example if a building and pest inspector inspected a property for a client, but he himself liked the state of the property and the purchase price, would he/she be able to deliberately write a bad report for the client exaggerating certain defects in order to try to convince the buyer that the property was bad enough to either cancel the contract outright or to cast enough doubt in the client's mind for him to renegotiate for a price which the vendor would not be able to accept. Then the building and pest inspector could make secret arrangement with the selling agent that the inspector himself will pay 1-2k more for the property to secure it for himself.

    Has anyone heard of this happening before? Would it be prudent to not discuss the price of the sale with the building and pest inspector to protect yourself from this?
     
  2. D.T.

    D.T. Adelaide Property Manager Business Member

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    Who did you use?
     
  3. KayTea

    KayTea Well-Known Member

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    That's an interesting perspective......geez, I hope this isn't happening (but I'm sure there'll be a horror story or two to show that it has).
     
  4. Coota9

    Coota9 Well-Known Member Premium Member

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    No doubt it would happen,but I would have thought they would be found out rather quickly and exposed if they did this
     
  5. spludgey

    spludgey Well-Known Member

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    How would I go about obtaining a B&P inspector licence? ;)
     
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  6. Coota9

    Coota9 Well-Known Member Premium Member

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    How about a JV Spludgey?:)
     
  7. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    It could happen, but a bit of an elaborate 'what if'. Lawyers, brokers, agents, depreciation QS people could all encourage you to not buy so they could leap in buy the one you rejected.
     
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  8. Ed Barton

    Ed Barton Well-Known Member

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    Never heard it happening, but I guess it could. It would be very isolated if it did happen.

    Why would you discuss price with the B&P inspector? It's none of their business. I've never discussed price with an inspector and it's never come up. Their job is to provide a report about what, if anything, is wrong/right with the place. Any after report discussions with the inspector is about padding out the report. eg - it sounds like the roof is going to blow off in the next gust of wind? - Yes that's right; or no, it just needs a couple of cracked tiles replaced.
     
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  9. wylie

    wylie Moderator Staff Member

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    I would think the building inspector trying to do something dodgy like this would be risking his career, reputation and livelihood. That doesn't mean it has never happened, but I would think it highly unlikely (though there are bad apples in every occupation).
     
  10. JacM

    JacM VIC Buyer's Agent Business Member

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    It could happen, but very unlikely. The risk of getting sued for a misleading report would be far greater than any gains to be made by trying to snaffle the property away from you.
     
  11. Perp

    Perp Well-Known Member

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    B&P inspectors would probably have a fiduciary duty towards their clients, wouldn't they?
     
  12. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Possibly not - unless there is caselaw
     
  13. Raydar

    Raydar Well-Known Member

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    Is there an industry body for them? Much the same as REIA have a Principles of Conduct.
     
  14. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    They are licenced builders.
     
  15. Propertunity

    Propertunity Exclusive Real Estate Buyers Agent Business Member

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    Let's say you are right (which I seriously doubt) for the sale of the argument. How many P&B inspections would an inspector do in 1 week? 2-3 per day 5 days per week. That's 10-15 inspections per week.

    If the devious P&B guy wanted to buy properties he could buy maybe 10 in total? Maybe 20?

    I think he might have done that in year 1 or 2 of his business if he were so inclined. :rolleyes:

    Seriously, go buy a few houses and forget about it :)
     
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  16. AndrewTDP

    AndrewTDP Urban Planning Consultant Business Member

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    Hmmm this gives me an idea... :p
     
  17. DaveM

    DaveM Adelaide Buyers Agent & KFC Strategist Business Member

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    It could happen, but only on houses without trees or saplings on the council land
     
  18. wylie

    wylie Moderator Staff Member

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    Is this the right thread for this answer?
     
  19. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    I've occasionally looked at some of the houses clients purchase and think, "Wow that's an amazing deal, I wish I was buying it."

    That's not really enough reason mess the deal up for them though. Instead I've used this sort of info to go find a property nearby and get a good deal for myself. :)

    I can't categorically say that this doesn't happen, but it's incredibly unlikely. Most of the people you deal with aren't even serious investors themselves.
     
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  20. Scott No Mates

    Scott No Mates Well-Known Member

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