Mandatory Building and Pest Reports Now Homeowners’ Responsibility
The Victorian government has announced its intention to shift the responsibility of pre-sale building and pest inspections from home buyers to homeowners. This proposed change is part of their strategy ahead of the upcoming election. Currently, home buyers in Victoria are responsible for organizing and financing these inspections.
Mandatory Building and Pest Reports: A New Responsibility
The government aims to create a mandatory building and pest inspection scheme if re-elected. They contend that the existing setup is unfair and places an excessive burden on potential home buyers. Consumer Affairs Minister Nick Staikos emphasized the importance of these inspections, stating that they can significantly influence a buyer’s decision.
Government’s Perspective
Premier Jacinta Allan articulated that the current process requires reform. She likened it to the automotive industry, where sellers cover the cost of roadworthy certificates. This change, according to Allan, would alleviate financial pressures on home buyers.
- The estimated cost for building and pest inspections ranges from $500 to $600.
- Approximately 50% of buyers end up paying for multiple inspections during their property search.
- 17% of buyers reportedly invest up to $4,200 on inspections, with some conducting seven or more.
According to the government, nearly 11% of buyers decided not to proceed with an offer after reviewing inspection reports. Alarmingly, 17% of buyers have conducted no inspections at all, primarily due to costs and complexities associated with obtaining them.
Critique from Opposition and Industry Experts
The announcement has faced scrutiny. Opposition Leader Jess Wilson criticized it for lacking detail, questioning why the government would not implement the change sooner. Concerns were also raised by industry representatives. Angela Perry from Master Builders Victoria cautioned against potential misuse by real estate agents. She warned that reduced inspection costs could result in compromised report quality.
Proposed Legislative Changes for 2027
The Victorian government has pledged to legislate the new scheme by early 2027, should they secure re-election. This initiative intends to ensure that all vendors provide inspection reports before finalizing a sale. Additionally, buyers would retain the option to pursue their own inspections if desired.
Learning from the ACT Model
The government plans to model its scheme after the Australian Capital Territory (ACT), which is the only Australian jurisdiction with a similar requirement. In the ACT, it is mandatory for vendors to provide building and pest inspection reports prior to the sale. Reports must be conducted by certified professionals within three months of the sale. In this model, vendors can recoup inspection costs from buyers post-contract signing.
As discussions continue, the Victorian government aims to collaborate with industry stakeholders to finalize the details of the proposed mandatory building and pest inspection scheme.
