Thursday, June 19, 2014

Vendor's duty to disclose major defects.

We have carried out an inspection and issued a report during May 2013, in which moisture issues within converted ground floor space were raised to the purchaser.

Subsequently the purchaser expressed concerns to the real estate agent, which assured that the moisture has caused due to splash water from stored fish tanks.

Somehow major leaks observed following a heavy rainfall soon after settlement date. Of cause we were called back for further investigation. Our opinion was: the leaks are likely caused due to defective waterproofing and inadequate drainage discharge to the concrete block wall. The leaks were triggered and worsened by the accidental gutter damages caused by the house moving truck.

Following further inquiries and investigations, it was revealed that the vendor has engaged an drainlayer to carry out tanking and drainage work for the ground floor alteration before marketing the property and the drainlayer was called back to investigate the tanking failure just before settlement date.

Now the vendor is getting sued through district tribunal. A first hearing is due end of this week. I was told to expect a witness phone call from the tribunal. It is going to be a interesting to see the whole process. The real estate agent is likely to get jointed at a later stage.

Monday, June 16, 2014

Verbal report - a controversial type of inspection

We are doing building inspections in accordance with NZS4306, where it is clearly stated that a written report is to be issued as a part of the inspection service.

There are certain inspection companies, which are rejecting to carry out any verbal-only inspection because of the following reasons:

  • Non-compliance with NZS4306;
  • Lack of control in regard of what inspectors are talking about on site;
  • Potential liability due to lack of written proof;
  • Potential inconsistency between verbal consultation and written report;
  • lack of control to what type of questions being asked on site by clients.

We still keep providing verbal inspection service for many reasons, which I have explained in the past and will provide further opinions later on. Here is a fresh case just happened a couple of days ago:

A client called from a small town outside Auckland inquiring about an urgent verbal-only inspection for a house to be auctioned next day. Reasons for verbal consultation would be simple: firstly, client has never seen the house by eye; secondly, time is so limited that there is no way we can issue the report at the same day, furthermore, client is waiting to make the decision regarding auction attendance based on our inspection result.

We have provided the verbal only inspection service. The first thing we have told the client is that the house is directly under a high voltage power line. This factor would be so obvious for normal buyers, but the client is not aware of that, simply because never seen the house by eye and there is no such information disclosed by the vendor and the real estate agent on the advertisement.

It is to be clarified that, verbal consultation is not regarded as a full inspection, but should be regarded as a major part of the inspection. When time is constrained, this type of consultation is the only way a inspector can deliver valuable information to the client. Though all should be agreed that a written report eventually is to be issued if client has ended up buying the inspected property.