Towards mandatory inspection for properties over 25 years old

In the current market, many real estate transactions are conducted without due diligence, especially in multiple bid situations. (Photo: 123RF)

GUEST BLOG. Last September, I recommended making an inspection mandatory when buying a building. I am therefore delighted that the Régie du Bâtiment du Québec (RBQ) recently presented a draft regulation that would oblige buyers of residential buildings aged 25 and over to carry out a prior check.

the current market

In the current market, where the pressure on buyers is strong, many real estate transactions are made without an inspection. This is particularly the case in multiple bid situations. Buying without inspection can result in significant and unpredictable costs. It will also be difficult for the buyer to prove that he acted as a prudent buyer in the event of a possible hidden defect plea.

There will be exceptions:

  • The transfer of property between ex-spouses, parents and children, grandparents and grandchildren;
  • Redemption between co-owners;
  • Buying a building for less than $50,000 in real estate appraisal;
  • The purchase of a forest camp, a hunting and fishing camp, or a building in an establishment or a building that is not included in the Asset Appraisal List;
  • The purchase of a cottage or holiday home that is not accessible by a motorable road or has certain amenities (running water, electricity, septic tank, heating and a full bathroom);
  • If the seller provides the buyer with an inspection report that is less than six months old;
  • The purchase of a building in demolition order;
  • The purchase by an inspector.

oversight of inspectors

Currently, anyone can view properties without having received any training. Around 28% of inspectors work without supervision. The others are members of associations. These associations oversee their inspectors well, but their practices are not uniform. Don’t hesitate to ask your real estate agent for suggestions. It will provide you with a short list of professionals or building inspectors who meet specific requirements. Finally, all inspectors are overseen by a single organization, the RBQ.

Here are the basic principles of the government’s proposed regulations:

  • The need for basic and continuous training of inspectors;
  • The establishment of a uniform standard of practice;
  • The obligation to take out liability insurance;
  • The requirement for a standard service contract;
  • The obligation to prepare an audit report.

The RBQ commissioned the Bureau de Normalization du Québec (BNQ) to develop the standard that will regulate the actions of the inspectors. This standard was the subject of a consultation from June to October 2021 and publication is planned for summer 2022. Two draft regulations were published on February 23, 2022. The consultation ends on April 9, 2022.

effects

Some part-time inspectors quit the job when they feel the obligations and costs are too high for their income. The new regulations for inspectors will clean the market of less competent inspectors. With the introduction of inspection requirements, the real estate market will need many new inspectors.

In my recent conversations with inspectors, some are concerned. You mention that the RBQ’s measures to ensure the competence of contractors are insufficient. In June 2021, the Quebec Auditor General condemned the administration of contractor licenses. The RBQ then announced corrective action. The RBQ faces a major challenge in supervising inspectors. I hope the industry gives the runner a chance.

I am amazed at the quality of the standards recommended by the BNQ. It’s a key element. These standards were developed in close collaboration with industry players, so I’m relatively optimistic. Associations of inspectors have been campaigning for better surveillance for many years. It’s a big step forward. Finally, buyers are better protected.

I invite you to consult my previous articles.

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