Can You Sue a Building Inspector Who Missed a Defect?
You fell in love with the house, checked the building inspection report showed no issues, and you bought the property with confidence. Months later you discover a serious defect — rising damp, a cracked slab, massive termite damage.
It’s too late to get out of the purchase of the property. That leaves you with only one option: to sue the building inspector who wrote the report.
A building inspector who prepares a report owes you a duty of care to exercise reasonable skill and diligence. If a competent inspector, carrying out a proper visual inspection in line with the relevant Australian Standard, should have identified the defect, and the inspector’s negligence caused you a financial loss, you may have a claim in negligence. Depending on how the inspector marketed their services, conduct that was misleading or deceptive may also engage consumer protection law.
Inspection reports typically contain disclaimers limiting the inspector’s liability — for example, excluding defects hidden behind walls, under floor coverings, or in areas that were inaccessible on the day.
The ACT Courts have recently considered exactly this in Shannon & Anor v Residential Reports Pty Ltd [2026] ACTSC 66. Despite the careful wording of exclusions in the report, it decided that the defect was reasonably detectable using non-invasive methods, and the building inspector should pay for the damage done by undetected termites.
If you’ve found a defect after purchase and believe the inspection report should have caught it, the key first steps are to get an assessment of the defect, a quote for repair, and get legal advice promptly before any limitation period runs out.
