If you were buying a car for $25,000, how would you react if the seller said you couldn’t have an independent mechanic inspect the car and give you a report? Or if the seller said you had to use their chosen inspector? Or if you would have to pay an extra $500 to have an inspection done.
If you are like the audience I spoke to the other day – you would probably say something is fishy and you would run a mile.
Why then, does the building industry think that this sort of behaviour is acceptable when you sign a contract for a building project worth tens of times that amount?
Surveyor Vs Inspector
Before we proceed, I should explain the roles of a building surveyor and an independent inspector.
Building Surveyors
Once upon a time the local council was responsible for issuing building permits, conducting mandatory (stage) inspections and issuing the Occupancy Permit once the build was complete. This role has since been outsourced to professional building surveyors.
An issue then emerged that some Building Surveyors seemed to be too friendly with the builders whose work they were checking. After all, the Building Surveyors were appointed by the builders and a Building Surveyor that got a reputation as too fastidious would likely not be appointed by builders.
In response, in around 2016, the law was changed such that owners were now to appoint the Building Surveyor. However, that hasn’t really worked as most owners don’t have a preferred Building Surveyor and builders are very good at ‘suggesting’ their preferred Building Surveyor.
Building Inspectors
Building Inspectors, as least as the expression is commonly used, don’t have a formal legal role. They are often engaged by owners to complete a defect report once the build is complete. Good Building Inspectors have a detailed knowledge of the building regulations, National Construction Standards and applicable Australian Standards.
I recommend that you conduct your final inspection accompanied by a Building Inspector as they will provide a defect report that not only includes defects that mere mortals would not be aware of but also typically refers to the relevant regulation or standard. Builders typically find this sort of report much harder to dispute than a list from an owner.
To simplify the difference between the two – Building Surveyors are responsible to ensure that buildings are safe while Building Inspectors are there to ensure the quality and finish.
Builders’ Reactions
Some Builders are not only opposed to owners appointing their own Building Surveyor but they are even more opposed to owner appointed Building Inspectors.
A building contract that we reviewed recently contained the following:
- The Owner was encouraged to use one of the two “excellent and timely” Building Surveyors preferred by the builder;
- If the Owner appointed their own (non-preferred) Building Surveyor then there was a list of more than 15 conditions (seriously) including that the Building Surveyor must guarantee a next day service and the Builder could refuse the Building Surveyor on any grounds. In addition, if the owner appointed the Building Surveyor then the owner could not also engage a Building Inspector, the Building Period would be extended by a week for each inspection and the owner would have to pay the Building Surveyor’s fees.
In other cases, there are substantial fees of up to $1,000 to allow an owner appointed Building Surveyor on site.
Clearly, some builders are imposing very significant barriers to the appointment of independent Build Surveyors.
Concluding Thoughts
As I said at the outset, if a used car seller tried this we would be very concerned.
However, the building industry seems to think that this is perfectly reasonable. Given a headline article in the Sunday Age of 19 May, 2024 that started with “Up to 60% of new apartments in Australia are riddled with construction flaws…” this is not a position that owners should accept. I could also cite examples of ‘tame’ Building Surveyors who have chosen not to raise serious building defects pointed out by owners that are now the subject of complaints to the Victorian Building Authority.
To be fair, there are many professional and competent Building Surveyors out there – but when the builder imposes their preferred Building Surveyor you can’t know whether you are getting one of these.
For this and many other reasons I continue to believe that an independent review of your building contract, before you sign it, is essential. I am very aware that Builders don’t like this and throw tantrums of various sorts. But how would it pan out if a parent gave in every time their toddler threatened to throw a tantrum?
Lewis O’Brien & Associates
Lewis O’Brien & Associates offer fixed price reviews of the standard Domestic Building Contracts. This includes a formal written review, suggested special conditions to restore some sense of fairness to the contract and a follow up zoom / phone call to answer your questions.
To arrange a review, please contact us.
If you aren’t about to sign a building contract but know someone that is – please share this article with them.
Lewis O’Brien
Your Preferred Property Lawyer