Building Law – Claiming for an Incorrect Pre-Purchase Report

23/02/2017

A recent case in the New South Wales District Court illustrates the remedies of a purchaser who has obtained a Pre-Purchase Report before buying a property.  In some circumstances, where that Pre-Purchase Report is incorrect, the Purchaser can take proceedings against the Author of the report.

In the case of Cate Doosey v Nigel Walsh, the Court considered a negligence case against the Author of an incorrect Pre-Purchase Report.

In December 2011, the Plaintiff in the case had just completed the purchase of a property at Bulli near Wollongong in New South Wales.  She moved into the property with her children.  Shortly after moving in, the Purchaser’s daughter was playing near the balcony on the first floor of the house when the balcony gave way.  The child fell about 2.5 metres to the ground and was badly injured.  The mother of the child and the child claimed they both suffered injuries as a result of the traumatic episode concerning the fall.  The daughter lost consciousness and was hospitalised for several days and suffered serious head injuries.

Prior to buying the house, the mother had obtained a Pre-Purchase Inspection Report from a firm in the area.  The firm when it issued the report gave the impression that the property was not defective and that the property was fit to be lived in.  The Writer of the report had not inspected the balcony and did not point out to the Purchaser that the balcony was defective.  The Owner obtained evidence to the effect that the balcony was in effect in poor condition and that this poor condition led to its collapse and the injury of the child.

The case was heard in November 2016 and on 3 February 2017 the Court handed its decision which was in favour of the mother and the child.  The Court held that the Writer of the Pre-Purchase Report had a duty to the Purchaser to exercise care when preparing a report.  The Court found that the Writer of the report had been negligent in the preparation of the report and this had led to the loss suffered by the mother and the child.

In the result the Court awarded the Plaintiffs significant damages for their injuries and consequential loss.

What was interesting about the case was that it indicated that Authors of Pre-Purchase Reports must exercise care in carrying out their inspections.

If you have any enquiries about building and constructions matters or defects or losses concerning buildings please feel free to contact Richard Watson, an Accredited Specialist in Building and Construction or his assistant Shereen Da Gloria to discuss your concerns.