{"id":20443,"date":"2018-03-07T01:00:25","date_gmt":"2018-03-06T14:00:25","guid":{"rendered":"https:\/\/www.realestatetalk.com.au\/?p=20443"},"modified":"2018-03-07T01:00:25","modified_gmt":"2018-03-06T14:00:25","slug":"sellers-required-to-supply-reports-andrew-mackie-smith","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/sellers-required-to-supply-reports-andrew-mackie-smith\/","title":{"rendered":"Sellers required to supply reports \u2013 Andrew Mackie-Smith"},"content":{"rendered":"

How far are we from having a building and pest inspection report generated as part of the listing process.\u00a0 Paid for by the seller and provided to all buyers.\u00a0 Potentially saving buyers hundreds of dollars.\u00a0 There are good reasons why a seller would want to do this.\u00a0 Andrew Mackie-Smith<\/strong> explains.
\nTranscript:<\/strong>
\nKevin:\u00a0\u00a0<\/strong>I don\u2019t know how many times I\u2019ve been approached by a purchaser who\u2019s had to go to an auction only to find that they\u2019re outbid at the auction and then all the money they\u2019d spent on building and pest inspections is effectively just wasted. And it can cost several hundred dollars. It\u2019s a very frustrating situation.
\nThere is a solution to this, and it\u2019s a matter of a lot of governments around Australia coming to the table to talk about mandatory building and pest inspection reports generated by the seller at the point of listing. This has been a major drive for a company called BuildingPro and its two owners, Andrew Mackie-Smith and Andrew\u2019s wife, Trish. Andrew joins me to talk about this.
\nAndrew, it seems to me to be a very logical solution to a very difficult situation for a lot of buyers, and that is to have this building and pest inspection done upfront. Is it being done anywhere else in Australia at this point in time?
\nAndrew:\u00a0\u00a0<\/strong>Yes, Kevin. In fact, it is. In the ACT and Canberra, it\u2019s been around for the last 15 years. So, since 2003, they\u2019ve enjoyed sellers providing building and pest reports as well as other reports, too.
\nKevin:\u00a0\u00a0<\/strong>I\u2019ve spoken to buyers and sellers, and I\u2019ve spoken to agents in the ACT who tell me that it works extremely well. There\u2019s no opposition to it; it just seems to make a lot of sense. The question that I ask, though, Andrew, is can a buyer rely on a report that\u2019s been generated by a seller?
\nAndrew:\u00a0\u00a0<\/strong>If you\u2019re in the ACT, yes, you can. The legislation makes that clear, and you can rely on it. In fact, how it works is the seller commissions a suite of reports including building, pest, energy, compliance, and asbestos reports. They provide those to potential purchasers, and they get that free of charge. And then the eventual purchaser will have that report and those reports transferred into their name. They can rely upon them, and that\u2019s enshrined in the law.
\nSo, it\u2019s very clear, and there are heavy penalties for sellers not disclosing, and there are also penalties for those consultants. And there\u2019s a clear path for them to be responsible.
\nWhereas in other states if a seller provides a report, there\u2019s a big question mark. In fact, if you read the fine print on those reports, Kevin, it clearly says \u201cA third party cannot rely on this report.\u201d
\nOnly in Canberra can you rely on it, and that\u2019s why I think the law needs to be changed to make this clearer.
\nKevin:\u00a0\u00a0<\/strong>Now, that point you made about \u201cthird parties can\u2019t rely on the information in this report,\u201d is that done to protect the building inspector from having people pass it on, or is that a legitimate statement of reliability \u2013 or lack of reliability?
\nAndrew:\u00a0\u00a0<\/strong>I\u2019m no lawyer, but what I understand is that there needs to be consideration given under the law. In other words, if you provide a service to someone, the consideration is normally payment in return of that professional service.
\nNow, if third parties are relying on that report, they don\u2019t have a legal arrangement with the building inspector because they\u2019re a third party and the inspector hasn\u2019t provided the report to them and they haven\u2019t accepted the terms and conditions and the scope of that agreement. In other words, often a third party will get a report and they don\u2019t know the limitations that the inspector might have laid out in an inspection agreement.
\nGoing back a step, when you\u2019re a building inspector, you tell the client through an agreement \u201cThese are the things I\u2019m going to inspect, and these are the things I\u2019m not going to cover in the inspection.\u201d So, a client would know those things going into it, but a third party might not have those conditions and wouldn\u2019t know.
\nSo, there is a reason beyond just covering the building inspector against litigation. It\u2019s more than that.
\nKevin:\u00a0\u00a0<\/strong>This seems like a very simple and very logical solution to, as I said at the start, a difficult situation for buyers. But it does actually in itself represent a fairly seismic shift in the law, because at present, it\u2019s very much buyer beware. But this is almost moving the onus from the buyer back to the seller, isn\u2019t it?
\nAndrew:\u00a0\u00a0<\/strong>Yes, Kevin, and I think there\u2019s a general move worldwide towards more seller disclosure. In fact, 30 states of the USA have strict seller disclosure laws, and in London. they have seller disclosure. And as we\u2019ve said, it\u2019s been in Canberra for 15 years. So, it\u2019s working elsewhere, and progressive places are taking this up.
\nThe buyer beware law \u2013 or\u00a0caveat emptor<\/em>\u00a0\u2013 has been around since the 15th<\/sup>\u00a0century, and it\u2019s quite archaic, made for the wealthy landowners to protect their interests. But now you have people using the Internet to search for properties and information, they\u2019re hungry for more information. They want to know the condition, they want to know about things like flood risks, they want to know if there\u2019s asbestos, are there any unauthorized business works on the property, are there significant pest infestations or subsidence?
\nAnd why shouldn\u2019t they get to know that? Houses are very expensive in Australia; it\u2019s only fair that people get this information. And sellers who are recognizing this and taking it upon themselves to provide disclosure are actually finding something quite interesting \u2013 that they\u2019re benefitting by getting a better sales price.
\nNow, that\u2019s anecdotal, but that\u2019s my experience as a building consultant in this field for the last 15 years.
\nKevin:\u00a0\u00a0<\/strong>I wish you every success with it. I know that it\u2019s going to take a lot of work to do it, but it certainly does make a lot of sense, as I said at the start.
\nAndrew Mackie-Smith from BuildingPro, thank you so much for your time.
\nAndrew:\u00a0\u00a0<\/strong>Thanks, Kevin.<\/p>\n","protected":false},"excerpt":{"rendered":"

How far are we from having a building and pest inspection report generated as part of the listing process.\u00a0 Paid for by the seller and provided to all buyers.\u00a0 Potentially saving buyers hundreds of dollars.\u00a0 There are good reasons why a seller would want to…<\/p>\n","protected":false},"author":176692471,"featured_media":20444,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[32,10,11,13,36,23,25],"tags":[101],"class_list":["post-20443","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-buying-a-property-topic","category-kevin-turner-sponsored-channels","category-kevin-update","category-latest-story","category-property-investment-topic","category-selling-a-property-topic","category-sponsored-channels","tag-podcast"],"yoast_head":"\nSellers required to supply reports \u2013 Andrew Mackie-Smith - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/sellers-required-to-supply-reports-andrew-mackie-smith\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Sellers required to supply reports \u2013 Andrew Mackie-Smith - 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