In light of the recent Real Estate Agents Authority (REAA – CAC10011) decision against an Auckland Real Estate Agent who was prevented from contracting a specific house inspection company by the contract of sale and purchase, it is timely to re-visit the house inspection industry and really understand the serious consequences of this conduct.
The house inspection industry is self-regulated through the Accredited Building Surveyors Programme that was developed by The Building Officials Institute of New Zealand and a special interest group, made up of inspection and surveying industry professionals, to protect home buyers and sellers.
The programme ensures accredited inspectors have the knowledge, ethics and experience to conduct their jobs to the highest possible inspection standards. Accreditation is formal industry recognition that a person has the professional ability, education and standard of competence required to undertake building surveying inspections.
Anyone can set up as a house inspector or building consultant. There are many in the industry who do not currently have appropriate training and qualifications to competently undertake the job, and there is no way for home buyers to know this.
An Accredited Building Surveyor has demonstrated to an expert panel their full compliance with the NZ Standards for property inspections and has been interviewed to confirm their knowledge and expertise.
In the Auckland case, which is not an isolated incident, the Real Estate agent was preventing the purchaser from using an Accredited Building Surveyor – an industry assessed expert.
As a buyer there are two critical questions you should be asking at this stage:
1. Why doesn’t the seller want me to have a proper inspection undertaken, are they misinformed or is there a serious problem with the home?
2. Why is a house inspector, often referred by the Real Estate agent, telling me they work to NZ Standards for properly inspections, yet are not accredited? Is it because they are unable to prove their abilities to the expert panel?
While these “house inspectors” are often cheaper, the cost to you once you own the home can be hundreds of thousands of dollars worth of missed defects that a trained building surveyor would detect.
The REAA Complaints Assessment Committee (CAC) stated that in the absence of clear evidence that the inspector (an Accredited Building Surveyor) was not conducting building inspections competently, it was unacceptable that the Agent sought to exclude the company on the basis that his reports may be “over the top”.
It went on to note that whilst a less thorough building inspection report may make confirmation of a property sale more likely and therefore helpful to a vendor, a potential purchaser could be correspondingly disadvantaged by such an approach. We are constantly working with property owners who have bought problem homes with repair bills often in the hundreds of thousands. Too many of these relied on sub-standard property inspection reports to make their ill-informed decision.
The CAC then provided their view that the parties should be free to choose the provider of services such as the particular company and should not be excluded from making a particular choice by an agent acting for the vendor. This is a view also recommended in the NZ Property Inspection Standard.
In conclusion, the consequences of this agent’s action could be detrimentally significant to the buyer to the tune of hundreds of thousands of dollars in missed defects, financial ruin, stress-related health issues, and the list goes on.
You can protect yourself from this situation by demanding an Accredited Building Surveyor. If the Agent or Owner says no, then YOU decide how much risk you are prepared to take on. Or as that annoying little ad suggests, you may just decide to give it 30 seconds then walk away!