When a building inspection report missed something

First, what a report is not

A missed problem is easier to judge against what the report set out to do. NSW Fair Trading says its role “is to identify any major problems visible at the time of the inspection”, and that it “should not be used as a certificate of compliance for any law, warranty or insurance policy against future problems.” The QBCC says the same of Queensland’s inspections: “A pre-purchase building inspection is not a warranty against future defects.”

NSW Fair Trading lists the conditions that will affect the final report:

• “problems difficult to detect due to weather or other conditions such as rising damp and leaks”
• “the information you provide to the consultant”
• “the specific areas of the consultant’s ‘expertise’ as specified in the report”
• “problems that may have been deliberately covered up to make an area appear problem free”.

So the first thing to look at is the report’s own list of areas or items that were not inspected, and why. NSW Fair Trading says a report should include that list.

Queensland: the QBCC’s steps

The QBCC’s position is plain: “If your pre-purchase building inspection and/or termite inspection report fails to mention existing damage to your property, you must take your own action against the inspector.” Its complaint page sets out the order.

1. Write to the inspector. “You must write or email the inspector with your concerns giving them a reasonable timeframe (e.g. 14 days) to respond. Keep a copy of your correspondence.”
2. Complain to the QBCC if the reply does not settle it. Do it soon: the QBCC says time delays may affect its ability to make an accurate determination on the content.
3. Gather two documents. Copies of your letter to the inspector, and of the pre-purchase building or termite inspection report.
4. Use the online form. Log in or register on the QBCC Portal to complete the residential and commercial building work complaint form, uploading digital copies of the documents.
5. The QBCC assesses it. “We will assess your complaint and if required, we may inspect your property. We will then provide you with an investigative report you can use should you choose to pursue the inspector in the courts or with Queensland Civil and Administrative Tribunal (QCAT).”

The QBCC’s buying page describes the same route in short: lodge a complaint with it first, and it will provide a letter to take the matter to QCAT.

New South Wales: the consultant first

NSW Fair Trading’s advice comes in two stages. While the report is fresh: “If you are not satisfied with any aspect of the report or your dealings with a consultant, try to resolve the problem with them first.” If the consultant belongs to an industry association, you may be able to use that association’s complaint handling service, which the page describes as free.

After you have bought: “If you buy a property and later find problems not identified in the building inspection report, you should seek legal advice, particularly if the consultant’s negligence ends up costing you a lot of money.” The same page strongly recommends using only consultants with adequate insurance cover, particularly for professional indemnity.

The ACT: liability written into the law

The ACT is different because the seller supplies the building and compliance and pest reports. Under section 19 of the Civil Law (Sale of Residential Property) Act 2003, where one of those reports is false or misleading in a material particular, or was prepared without reasonable skill and care, and a buyer who bought under a contract incurs loss or expense because of it, the person who prepared the report is liable to compensate the buyer. Knowingly making a statement in such a report that is false or misleading in a material particular is also an offence under the Act.

Every such report must carry the preparer’s professional indemnity policy number and expiry date, or come with the insurer’s certificate of currency, and Access Canberra says all inspection services must have that insurance to protect the buyer if a problem is missed. More on those reports is on the ACT seller’s reports page.

Victoria and Western Australia: the insurance behind the report

Neither state’s buyer page sets out a complaint route for inspection reports. Both point to insurance chosen beforehand. Consumer Affairs Victoria: “Use an inspection service with full professional indemnity insurance. This will protect you if the inspection misses a problem that must be fixed.” Consumer Protection WA gives the same advice, for the same reason. Who holds what, state by state, is under who may write one.

Keep the paper trail

Every route above runs on documents. The QBCC asks for your letter and the report, and a NSW-style report should already carry the date of the inspection, its scope, and the areas it did not inspect. Keep the report as you received it, any written quote or agreement that set out what the inspector would check, and copies of every letter. The building and pest conditions page covers what the contract lets you do before settlement, which is a separate question from the inspector’s responsibility after it.