Webinar Highlights: What Every Inspector Needs to Know Before Their Next Report

The pre purchase house inspection​ is a key part of the home buying journey. As an inspector, you get to help buyers make informed decisions and understand the risks of future damage and the associated costs. But you could also face legal action if your report doesn’t adequately address all the issues and risks at the property at the time of your inspection.

In our recent webinar, Rapid Solutions CEO Belinda Smith sat down with legal expert Nick Pitt from Wotton Kearney to talk through why there’s been a rise in litigation against pre-purchase inspectors and the practical, effective steps you can take to protect your business.

Here are five helpful tips every inspector should know.

1. Litigation risk is increasing across the pre purchase house inspection​ industry

One of the most urgent messages from the webinar is that litigation risk is on the rise.

Due to rising mortgage rates, cost-of-living pressures and tighter budgets, any unexpected defect or damage can become a potential trigger for a complaint or legal claim.

Nick explained that inspectors are now seeing a sharp rise in claims, many based on emotional and financial stress rather than inspection errors. Even when a report complies with the standard, homeowners may look for legal avenues under Australian Consumer Law to recover losses.

“Inspectors are getting caught up in broader financial pressure,” Nick said. “It’s not always about negligence by the inspector. It’s about desperation from the homeowners.”

2. Disclaimers won’t shield you from Australian Consumer Law

While disclaimers and standard contracts are still essential, they don’t eliminate litigation risk. This is because consumer protection laws override many contractual protections.

Homeowners often allege that a pre purchase house inspection​ report was misleading or deceptive, even if the inspector followed the Australian Standard. A common example is stating “no defects found” while also noting limited access due to furniture. That contradiction can be used as the basis of a claim.

 “Clarity and consistency in how you report are essential for reducing litigation risk,” says Nick.

3. Be specific in your pre purchase house inspection reporting

Generic recommendations are not enough to minimise litigation risk.

Inspectors need to clearly document what they observed, what was inaccessible and what follow-up actions they recommend. Use precise, risk-focused language to warn homeowners when something could escalate into a serious issue, even if it’s only minor at the time.

For example:

Instead of: “Recommend structural engineer”, try:

• “We recommend a licensed structural engineer inspect deflection observed in window frames.”

And rather than: “No evidence of current water leak”, go for:

• “Old staining noted beneath bathroom. Recommend further assessment by a waterproofer before purchase.”

These kinds of statements show that you acknowledged potential risks and advised the homeowner accordingly, which can significantly reduce your exposure.

Your job is to inform the buyer of key risks to consider in their decision-making process, and without specific recommendations, they won’t necessarily know what next steps to take, including whether further specialists should be engaged for detailed, non-invasive inspections before that purchase decision is made.

These would typically be roof inspections, waterproofing or plumbing inspections and even a second opinion on termite risk from a termite management specialist. Read our article on pre-purchase reports for more on this.

4. Photographs are your best defence in a claim

When facing a claim, the best defence against litigation risk is often your photographs.

Photos help prove what the property looked like at the time of the pre purchase house inspection​. They’re objective, timestamped and incredibly hard to dispute, especially if the property has changed significantly due to renovations or removal of wall linings.

“We’ve had claims thrown out purely because inspectors had comprehensive photo records,” said Nick. “Without them, it’s your word against theirs.”

Make it part of your routine to take extensive photos, even of areas with no visible defects, and store them for at least seven years. You don’t need to include them all in the report, but they may save you later.

Even better, consider taking video footage of the property as you complete your inspection. Devices such as body cams are cost effective, particularly when you consider they might provide irrefutable evidence if a complaint arises.

The below Rapid case studies are clear examples of how more extensive photography and risk-based reporting could have protected the business owners from a legal claim:

• Case Study: The $140,000 Leaking Shower + What It Teaches About Major Defects
• Case Study: How Not Spotting Termite Damage Led to a $67,500 Settlement (+ How to Avoid It!)
• Bodily Injury: This Case Study Teaches Very Important Lessons

5. Managing client expectations helps prevent claims

One of the simplest ways to reduce litigation risk is to manage your client’s expectations from the outset. That means clearly communicating what the inspection covers, what it doesn’t and what the limitations were.

In your report, emphasise:

• The visual, non-invasive nature of the inspection
• Any obstructions or limitations
• The age and general condition of the home
• Specific areas of concern, what specialists should be engaged and when (including whether before the sale becomes unconditional).

Homeowners rarely understand inspection standards or the extent of the risk of termite attack (with one third of all Australian homes experiencing termite attack or damage at some point). Your job is to help them grasp the limits of what you’re offering and to highlight where further investigation is needed, outlining what those steps are.

Remember, people don’t sue because a house is old. They sue when they feel they weren’t warned about what might go wrong.

Bonus insight: subcontracting can increase your litigation risk

Many inspectors assume that if they subcontract an inspection, they’re not liable for the outcome. But this is a major misunderstanding, and it increases litigation risk.

If a client contracts with your business, you remain responsible, even if someone else performed the pre purchase house inspection​. Without proper indemnity agreements and clearly defined responsibilities, your business could be on the hook for someone else’s mistake.

If you subcontract:

• Ensure the Pre-Purchase Inspection Agreement includes all parties (the buyer, who they’re buying the inspection from, and who is doing the inspection)
• Get legal advice before entering into sub-contract agreements
• Make sure both parties understand their obligations
• Avoid blanket indemnities that leave you exposed

Final thoughts on pre purchase house inspections​

In a climate where claims are becoming more frequent and more costly, every inspector needs to take litigation risk seriously. From how you take photos to how you write your pre purchase house inspection reports, every part of the process matters.

Let’s recap the key strategies:

1. Be aware that litigation risk is increasing across the industry
2. Know that disclaimers don’t override Australian Consumer Law
3. Tell the full risk story. In other words, use specific, risk-based language in your reporting
4. Back up your reports with extensive photographic evidence
5. Manage your client’s expectations clearly and consistently

By making these practices part of your standard inspection process, you not only protect yourself against legal claims, but add more value to your clients and help protect your long-term livelihood.

TRAINING OPPORTUNITY: Rapid Training is launching a Termite Inspection Bootcamp for qualified pest inspectors who would like to sharpen their skills and adopt a risk-based reporting mindset. We’re kicking off with a pilot in Newcastle on 10 September 2025. Check our website or Facebook page for more information on how you can join.

Protect yourself with insurance

If a customer makes a claim for damages caused by something you missed in your pre purchase house inspection, insurance can help you pay for the legal fees and any damages that you are found liable for.

Rapid Solutions has more than 25 years of industry experience and offers affordable, quality professional indemnity insurance and general liability insurance. If you need to talk to an insurance industry expert about where you’re at and what you need to move your business forward safely, give Rapid Solutions a call on 1300 309 169.