Why get a Building Report?

So you are in the process of purchasing a home or investment property and you are wanting to put in an offer on a property you have found. The Real Estate agent (who don’t forget is working for the seller to get them the best price possible) asks … what conditions do you want to put into the contract?

The Consumer Organisation of NZ recommends five items to make your contract offer conditional to …

  1. The Title
  2. The Land Information memorandum
  3. A valuation
  4. A property report
  5. Finance

Items 1 & 2. Your lawyer will assess and make sure that there is nothing missing or creates an obstacle to any future plans you have for the property.

Item 3. A Registered Valuer will give you a report on the current value of the property. This is helpful in a rising market that you do not offer over market value or nearing the end of the the three year Valuation cycle.

Item 4. A property report, this will identify any obvious issues, along with some which are not so obvious. It will also help with what maintenance will be required.

Item 5. Finance, your lender will need to approve how much you are borrowing, whether it fits within their guidelines and your income. If you are one of the lucky ones who are not borrowing you don’t need this clause.

I would also recommend two others …

  1.  An Electrical assessment of the property.
  2. To have the property tested for Methemphetamine (P)

Why add these two in?

The Meth problem in NZ is HUGE and when it has been smoked or produced within a property the toxins get absorbed into the soft furnishings i.e. carpet, curtains, and into the walls and ceilings. Depending on the degree of use of the drug will depend on the degree of remediation. Which could be from a chemical wash down and replacement of soft furnishings through to a full strip out of wall and ceiling linings!

Why an electrical assessment? Over the years the cabling used has got better and early cabling has been found to break down, leaving exposed live wiring. There may have been alterations made legal or not, which may mean the switch board is at it’s limit. Illegal wiring can put your family at risk, if it does cause a fire.

What are you wanting from a Building Report?

  1. You want to know what condition the property currently is in. Is dry? Does it leak? Does it have insulation? Do the doors closed? Has it moved? Is that just been the normal course of settling or something bigger? Has there been illegal building works? etc.
  2. You want to know what maintenance tasks will be required in the short and medium term. This helps with budgeting going forward.

What will a Building Surveyor look at?

They will complete a visual inspection of the foundation, sub-floor (if you have one, it may be a concrete slab), the exterior, the roof, the roof space, the joinery (kitchen cupboards, bathroom vanities, windows and doors). They may take moisture readings in areas of concern.

Why just a visual inspection, why not an invasive report?

The first step is a visual building report, if this raised some major concerns, then possibly the seller would get an invasive building report done. This is often seen with buildings that have weather tight issues. With invasive inspections there is always remedial works to be completed afterwards. For example if we thought that a water pipe to a shower was leaking, behind the shower was a cupboard which we could access the pipes, we could cut out some of the wall lining to have a physical look. This is an example of an invasive inspection. Once the Inspection has happened and either there repair job completed or there was no need for a repair, that wall lining will need to be replaced, it may require plastering and painting too. So there is a time and cost element to it.

Wouldn’t a Moisture meter tell you something is leaking?

A moisture meter is just one tool to gather information with. The building Surveyor will be using their eyes and often there nose, looking for tell tale signs. This is the same with using a thermal imaging camera for leaks. remember all tools have their limitations.

What to look for in a Building Surveyor?

NZ Standards 4306:2005 Residential Property Inspection states “that a person is required to be competent”. This leaves it pretty broad and the advantage of that is it brings people with different backgrounds in to the role. They may have been a Builder or an Architect or a Project Manager or a Council Inspector. Currently in New Zealand Building Surveying falls into a bit of a grey area, there is three bodies (which are not compulsory to belong to) they are the NZ Institute of Building Inspectors, the NZ Institute of Building Surveyors and the NZ Institute of Building Officials. Only recently are specific qualifications being developed. So what does this mean … look for someone who has construction experience, look for someone who will discuss the report with you, that the report is done to NZS 4306:2005 and that they have Professional Indemnity Insurance.

Good luck with your search for a property!

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