Monday, September 12, 2016

Cheaper pre-purchase property reports?

Prospective home buyers had raised concerns about the cost of obtaining pre-purchase property inspection reports.
Effective 15 August 2016 the NSW Government has amended the laws to help prospective buyers access information about important reports.

Agents are required to record details of some reports, including pre-purchase building and pest inspections and for strata units, strata (and community scheme) reports. Agents then inform buyers of these reports enabling them to contact the author to ask about obtaining a copy.

Note that the owner does not have to obtain any such reports.

The FairTrading site says the NSW Government supported sharing of reports. They were seeking ways to improve services for consumers through the new collaborative economy (also known as the peer-to-peer or sharing economy). There was a growing trend of businesses using online services to make key pre-purchase property inspection reports available at a lower cost than would otherwise be possible.

See (and if you like, hear) the full details of this at:
fairtrading.nsw.gov.au/../Changes_to_legislation/Property_reports_and_commercial_exemption_reforms.page

For answers to these questions go to:
fairtrading.nsw.gov.au/../Frequently_asked_questions_inspection_reports.page

What kinds of reports do agents need to record and disclose?
What happens if an agent isn’t told that a report has already been prepared or completed?
What does 'reasonably obtained' mean?
What information will agents need to record?
Must vendors, prospective buyers or other parties tell agents of any reports prepared or completed?
Do agents have to keep copies of reports to give to prospective home buyers?
How long will agents have to retain the records of the reports?
Is there a standard format for the record-keeping and providing the records to prospective buyers?
When will agents have to provide this information?
Must agents proactively disclose the records to any prospective home buyer?
Are agents liable for the accuracy of the reports?
Are there any penalties for failure to keep these records?

We particularly noted this question and answer:
How will agents know if these reports exist?

There are a number of ways an agent may know if a report had been prepared:
  • The vendor may tell the agent that reports had been done
  • The agent could ask the vendor if there are any reports
  • The vendor could ask the agent to arrange a building inspection report, a pest and timber inspection or a strata or community scheme report
  • A prospective home buyer could ask the agent to arrange access for an inspection, or for access to owners corporation’s or community association’s records
  • On behalf of a prospective home buyer, a building inspector could ask the agent to help arrange access to a property
  • On behalf of a prospective home buyer, a strata inspector could ask the agent to help arrange access to owners corporation’s or community association’s records.

All this may save a couple of hundred bucks on a million dollar purchase, but the key thing will be if the prospective buyer can access this information straight away instead of the day or two that it currently takes to it round up.