Bailey Winen says he recently spent about $1,800 ordering building inspections for properties he was considering buying.

“It’s quite annoying to have to keep doing it, when you send through an offer form — it is subject to a successful building inspection,” he said.

“It’s quite expensive to keep doing over and over again.”

Mr Winen, a property investor, said the costly inspections he ordered and paid for himself were later passed on to other potential buyers interested in the same property.  

Bailey Winen says building inspections are costly.(ABC News)

He is one of many South Australians who have considered skipping a building inspection because of the costs associated with it.

“I thought about that, but the risk far outweighs the reward, but you better have it for peace of mind.”

A proposal before state parliament would require people selling a house or unit in South Australia provide a current building inspection when their property is put up for sale.

Under law reforms from the Greens, vendors would have to have an inspection report available for potential purchasers to look at before they put an offer on a property.

It would also be up to sellers to pay for the building inspection, which would have to be less than three months old.

Greens MLC Robert Simms says the reforms would give buyers greater protection during the current housing crisis and provide “crucial information” about the property they want to purchase.

“At the moment, if you are somebody who is buying a property and want to get a building inspection report, you have to arrange it yourself,” Mr Simms said.

“That means a vendor can choose not to accept your offer if it’s contingent on a building inspection report.”

Greens MLC Robert Simms said a building inspection can cost up to $1,000 in South Australia.(ABC News: Che Chorley)

Another part of the changes would make the seller and real estate agent liable for damages if they provide false or misleading information as part of the building inspection and report process.

“What we don’t want to do is see people provide false reports,” Mr Simms said.

“For instance, if you purchased a property on the basis of a false report and then you found out you had to make hundreds of thousands of dollars in restorations to the property, then you could have a potential recourse under our bill.”

The building inspection report would also need to be prepared by a person who is not an associate of the vendor and by someone who is a recognised inspector.

However, the proposed law has strong opposition from those in the real estate industry.

Real Estate Institute of South Australia CEO Andrea Heading said the housing affordability issues were far greater than vendors paying for building inspections, with the proposed law not representative of concerns from prospective buyers.

“In the last 10 years we haven’t had [building inspections] come up as a major issue amongst purchasers … to say that they would prefer to have building inspections beforehand,” Ms Heading said.

“You’d love it to be an ideal world where people aren’t penalised over and over for a house, they go for but it’s the cost that’s there at the moment.”

Real Estate Institute of South Australia chief Andrea Heading said the law is opposed by many in the industry.(David Frearson)

Additionally, Ms Heading said a general building inspection report conducted by vendors would not consider the different requirements buyers were looking for in a property.

“Different buyers are looking for a property maybe for different reasons,” Ms Heading said.

“It’s more about buyer intention, are they going to buy a property to live in and renovate or are they going to buy it to bowl it over.”

Ms Heading called for the SA Greens to look at ways to reduce other costs for potential buyers in the crisis rather than building inspections.

In response, Robert Simms said the Greens had for years advocated for improvements to housing affordability through building more social and affordable houses as well as ways to replace state stamp duty with other options.

The Greens said its proposal would protect buyers who purchase a property on the basis of a false report.(ABC News: Viki Ntafillis)

“While this proposal will reduce up-front costs for prospective buyers, the primary goal here is to strengthen the hand of the buyer in the property market,” Mr Simms said.

Business and Consumer Affair Minister Andrea Michaels said while the state government would “consider this issue”, there were multiple concerns with building inspections paid for by a seller.

“The fact that the seller and the buyer have competing interests and a report provided by the seller may not be in the buyer’s best interest,” she said.

A similar scheme exists in the ACT where vendors pay for building inspections

Posted , updated