Pre-purchase inspection reports

Information on how to prepare a pre-purchase inspection report for a property.

Recording and disclosure requirements

When selling a residential property, real estate agents are subject to record keeping and disclosure requirements.

They are also required to make written records of any pre-purchase property inspection reports they are aware of.

This includes:

  • a building inspection of the property (usually AS 4349)
  • a pest inspection of the property
  • an inspection of documents about the property under section 182 of the Strata Schemes Management Act 2015
  • a certificate dealing with financial matters under section 184 of the Strata Schemes Management Act 2015
  • an inspection of documents about the property under section 26 of the Community Land Management Act 1989.

A report concerning a strata scheme is generally known as a ‘strata search’.

Agents need to disclose the records of pre-purchase inspection reports to prospective buyers when they ask for a copy of the sale contract for the property.

Record keeping requirements for property reports are under clause 33A of the Property and Stock Agents Regulation 2014 (the Regulation).

Reporting information

Agents must record the following details for each report:

  • the date the inspection was conducted
  • who requested the report
  • who prepared the report including their business contact details
  • whether the report author has professional indemnity insurance
  • whether or not the report is available for re-purchase.

How to find out if pre-purchase property reports exist

There are several ways that an agent may know if a report has been prepared:

  • the vendor tells the agent reports have been done
  • the agent asks the vendor if there are any reports
  • the vendor asks the agent to arrange a building inspection report, a pest and timber inspection, or a strata or community scheme report
  • a prospective home buyer asks the agent to arrange access for an inspection, or for access to the owners corporation's or community association’s records
  • a building inspector can ask the agent to help arrange access to a property, on behalf of a prospective home buyer
  • a strata inspector asks the agent to help arrange access to owners corporation's or community association's records, on behalf of a prospective home buyer.

Agent liability

The agent is only required to keep records of reports they are aware of or that can be reasonably obtained.

They aren't liable if another party withholds information about the existence of any reports or fails to provide accurate information.

Vendors don't have to tell the agent selling their home about any existing pre-purchase reports for the property, nor do they have to purchase any reports.

The meaning of ‘reasonably obtained’

Agents aren't expected to make exhaustive enquiries to find out if any reports have been completed.

For example, agents may know about reports if they have been asked to help arrange them, or if a vendor has provided the agent with details of reports.

If an agent asks a vendor or inspector for information but they refuse to provide it, the agent has made a reasonable attempt to obtain those details.

Agents may consider noting down any instances where relevant parties have refused to provide information.

The author of the report is responsible for its content. Agents aren't responsible for the report contents.

Agent record keeping obligations

Agents don't have to keep copies of reports to give to prospective home buyers.

However, records must be kept for at least 3 years.

Agents can keep and provide records in any form they choose. However, records must be kept in a format that can be inspected by an authorised officer at any reasonable time.

Vendors, prospective buyers and other parties’ obligations

Vendors, prospective buyers and other parties aren't obliged to provide information to agents about any reports.

Timeliness requirements for disclosure

This is a once-off disclosure when a prospective buyer asks for a copy of the sale contract. An agent doesn't have to disclose to the prospective buyer the details of any subsequent reports.

If a prospective home buyer requests a copy of the contract for the sale of the property then, regardless of whether or not they request any information about reports, the agent must disclose information recorded about the reports.

If a prospective home buyer who hasn't requested a copy of the sale contract asks about any reports, the agent isn't obliged to provide that information but may do so if they wish.

Penalties

Penalties of up to $4,400 apply to a corporation and up to $2,200 in any other case where there is non-compliance with these record-keeping and disclosure requirements.