Get Your Own Building Report

Steven Duxfield from Corcoran French

Building inspection reports have become a common feature of the residential property market in New Zealand. However, in post-earthquake Christchurch, where earthquake damage can be missed or repairs done hastily, building inspection reports are vital. We are increasingly seeing properties being sold “as is where is” or sold by a vendor that did not conduct or oversee earthquake repairs. In this context it is worth noting that a mix of different reports and advice is the safest way to guard your future investment.
The recent High Court decision of Steel v Spence Consultants Limited has reaffirmed the advice that you should get your own building inspection report. Vendors selling at auction or trying to make their property look more attractive to buyers often have a building inspection report conducted in advance so they can pass this onto purchasers. In Steel the vendors commissioned a building report prior to putting their property up for auction. The purchasers at auction relied on this report in the auction package instead of requesting their own, particularly its statements regarding weathertightness which were later proven to be incorrect. The purchasers brought a claim in the High Court following settlement when weathertightness issues presented themselves and were successful at trial receiving an award of $85,000 plus interest in damages. However, they were only successful in receiving half of the damages claimed because they did not seek their own report or building advice nor did they seek clarification where comments in the report raised questions. In addition, the purchasers were unsuccessful on one of the two grounds they argued on the basis of the disclaimer included in the building inspection report.
The question this raises is, how does a prospective purchaser protect themselves when buying a property at auction or where a building inspection report is already provided?
• Seek your own building inspection report and if possible seek other professional advice regarding the state of the dwelling, particularly if you are buying in Christchurch.
• Steel has suggested that the experience and position of the purchaser is relevant, for example a first home buyer is expected to know less than an investor with several properties in their portfolio.
• Clarify the position surrounding any earthquake related repairs and seek building advice in light of the repair work conducted.
• Seek legal advice regarding the effect of any disclaimer in the building inspection report. If the report is limited in its scope, you should be asking why this is the case.
• Review the building report carefully and discuss it with whoever has conducted it. If you are unsure of the practical consequences of any comments or elements of the report then you should query these.
Ryan Keen is a Solicitor in Rowan Aspros' property team and can be reached on telephone (03) 379 4660 or email: ryan@corcoranfrench.co.nz