The chief executive of a major building inspection firm believes a catastrophe the size of the insulation bungle could occur if the Government does not regulate the industry in New South Wales.
The warning comes as the New South Wales government continues to investigate legislation that would make it a requirement for all home owners to provide pest and building inspection reports to new buyers.
Archicentre chief executive Mark Stewart says the idea behind the legislation is good and it supports the initiative, but it would create a market for new inspectors and there are no regulations to monitor them. Currently, there are no requirements for building inspectors and dodgy operators will result in buyers paying tens of thousands repairing damages they weren’t aware existed, Stewart says.
“The Government has effectively deregulated the industry in New South Wales. The ACT did similar deals awhile ago, and it just makes the opportunity to suddenly become a house inspector without any regulations whatsoever.”
“There are about 100,000 properties sold every year in New South Wales, and if inspections are mandatory it’s a great consumer protection initiative, but you have to make sure people are qualified to do it.”
Stewart points to incidents in the ACT where “inspectors” have made reports without even entering the home. Some vendors even choose dodgy inspectors for their reputation of being slack.
Stewart also says there are areas where a potential conflict of interest could occur. “What if a real estate agent wants to start a business doing house inspections?”
“These issues need to be taken care of because if they’re not, you end up in a situation where buyers are unaware and there isn’t any protection for anyone.”
Stewart warns the situation could mirror the insulation disaster which plagued the Government right through the election campaign. The industry warned dodgy operators were rorting the system, using cheap insulation materials installed by unqualified workers.
Several homes were destroyed, including this property revealed by SmartCompany to be damaged as a result of poor insulation. Stewart says the same thing could happen again – new buyers would be forced to shell out thousands for damages they weren’t made aware of.
He says the Government needs to create a legislated set of standards for building inspections if this new requirement is to go ahead. He also wants to see a form of insurance to protect buyers from dodgy inspection reports.
“Someone could buy a house, put down million dollars for it and then find they have to spend another $100,000 to actually rectify some quite serious problems. This gets larger, because then you have people defaulting on loans, people in courts, and spending more money.”
“Our research shows that about 70% of people want to have a property inspection before they purchased, but at the end of the day, only 25% actually do because of cost, or other issues. We think it’s a fantastic initiative, but it needs to be done properly.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
