It is normal practice for a residential property inspection, commonly called a builder’s report, to be requested before a prospective purchaser decides to settle the offer of purchase. The important question is, how can one be certain that the report can be relied upon?
One of the main concerns a purchaser has is that the residence they wish to purchase does not have hidden faults that might subsequently prove expensive to remedy. This has become extremely important, and is on every purchaser’s mind, ever since the weathertight crisis hit the New Zealand housing market as the costs associated with weathertightness are not recoverable through insurance. To alleviate this fear it has become normal for a builder’s report to be called for, prior to settling a property.
The term “builder’s report” arose because it was normally a builder, or ex-builder, that was called upon to make an inspection and report on the condition of the building. However this approach was fraught with difficulties. Not all builders were familiar with the tell-tale signs of weathertight problems, nor did they have the skills of observation and recording required to provide a clear and precise report. Many gave only a cursory inspection, perhaps failing to observe serious defects present and were unaware of the professional approach required. Reports published have varied widely in quality and we frequently see examples of reports, often offered by the seller or land agent, which at best could be called misleading.
This unsatisfactory situation resulted in the preparation of a New Zealand Standard, NZS 4306:2005 Residential Property Inspection to give guidance to those preparing these reports, and guidance for their clients as to how a report should be prepared and what it should contain.
• This standard describes:
• The scope of a residential property inspection
• The purpose of the property inspection
• The scope and limitations of the written property report
• The competency required to carry out a property report to meet the Standard.
Primarily the standard requires that the surveyor identifies any serious defects in the building. Defects can vary from minor cosmetic blemishes or items of deferred maintenance that do not immediately or in the medium term endanger the structure or other building elements. Such deferred maintenance may have occurred through deterioration of paint finishes, sealants, flashings and the like. However, of greatest concern will be those serious defects that are causing damage to building elements now. These may be caused by the failure of materials, incorrect or high risk weathertight detailing or incorrect construction methods. It is these more serious defects that the standard requires to be identified and competently reported on.
The standard calls for a visual report only. It is not an invasive forensic investigation and therefore does not require the surveyor to identify the work required to repair a defect, the extent of damage that may have occurred to hidden elements, or speculate on the likely cost of repairs. The surveyor should however provide advice on the expertise required (plumber, electrician, licensed building practitioner (LBP) weathertight expert etc.) who the prospective owner should approach to carry out any further investigation to identify the extent of any damage, advise on the work required and the likely cost of repairs.
In addition to a thorough knowledge of construction, the ability to visually observe and assess a building is the most important of a building surveyor’s skills. The surveyor initially evaluates the whole building and identifies areas of high risk. Having observed areas at most risk the surveyor must then look for signs that indicate that there is an issue. Having identified a defect the surveyor must then describe the defect clearly and accurately and provide advice to the client that clearly indicates the seriousness or otherwise of the defect.
The first step for a prospective purchaser can take to ensure a pre-purchase report can be relied on is to check that the report has been prepared in accordance with the New Zealand Standard NZS 4306:2005 Residential Property Inspection. A report prepared to this standard should contain a Certificate of Inspection signed by the author of the report and a Summary list of items inspected.
The second and equally important step is to verify that the person carrying out the inspection has the necessary skills and is carrying out the inspection as an independent professional. A building surveyor should be able to provide evidence that they have the skills necessary by being able to demonstrate third party verification of their competency. This third-party verification of competency must include; training, a code of ethics, continuing professional development (CPD) requirements and proof of Professional Indemnity Insurance. The Building Officials Institute of New Zealand, (BOINZ) Accredited Building Surveyors preparing pre-purchase reports meet these requirements.
