You’ve ordered a building inspection report for an apartment you’re considering buying. It comes back with a list of defects, each tagged with a severity level. But what do those levels actually mean? And more importantly — which ones should change your decision?
Here’s how to read them.
The Typical Classification System
Most building inspection reports in Australia use a three- or four-tier severity classification. The exact labels vary between inspectors, but the categories are broadly consistent:
Minor defects are cosmetic or maintenance issues that don’t affect the structural integrity or safety of the building. Think hairline cracks in plaster, minor paint defects, small chips in tiles, or slightly misaligned fixtures. These are normal wear and tear, or minor construction imperfections that every building has.
Moderate defects (sometimes called “non-critical”) are issues that need attention but aren’t immediately dangerous. They may worsen over time if left unaddressed. Examples include failed sealant around windows, minor water staining suggesting a past leak, cracked grout in wet areas, or deteriorating balcony coatings. These won’t bring the building down tomorrow, but they signal deferred maintenance.
Major defects (sometimes called “critical” or “significant”) are serious issues affecting structural integrity, weatherproofing, or fire safety. Cracking in structural concrete, evidence of active water ingress through the building envelope, compromised fire-rated walls, or significant movement in foundations — these are the ones that cost real money to fix and can affect habitability.
Safety hazards are the most urgent category — defects posing an immediate risk to occupants. Missing balustrades, exposed electrical wiring, non-compliant handrails, or asbestos-containing materials in poor condition. These require immediate remediation.
What Matters for Apartment Buyers
If you’re buying into a strata scheme, the key question isn’t just “what defects exist?” but “who pays to fix them, and when?”
Minor defects: Generally not a concern
Every building has minor defects. In a new building still under the builder’s defect liability period, these should be rectified by the builder. In an older building, they’re just part of ownership. A long list of minor defects shouldn’t scare you — it often just means the inspector was thorough.
Moderate defects: Look at the pattern
A handful of moderate defects in an older building is normal. But pay attention to patterns. Multiple water-related moderate defects across different areas — staining on ceilings, failed sealant on multiple windows, deteriorating waterproofing membranes — can suggest a systemic issue rather than isolated problems. Systemic issues are expensive.
Also check whether the owners corporation is already aware of these issues. Review meeting minutes for discussion of maintenance and repairs. If moderate defects have been noted but not addressed for years, that tells you something about how the building is managed.
Major defects: Understand the financial exposure
Major defects are where buying decisions change. The critical questions:
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Has the defect been assessed by a specialist? A building inspector identifies defects; a structural engineer, hydraulic consultant, or facade specialist quantifies the scope and cost of remediation. If a major defect hasn’t been specialist-assessed yet, the true cost is unknown.
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Is there an active defect claim? For buildings less than six years old in NSW, the owners corporation may have a statutory warranty claim against the builder for major defects. Check the strata records for any ongoing defect claims, mediation, or legal proceedings. An active claim means the builder may cover remediation — but it also means years of uncertainty.
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What’s in the capital works fund? If there’s no active claim and the building needs major repairs, the money comes from owners. Check the fund balance against any estimated remediation costs. A building with a major waterproofing failure and a thin capital works fund is a special levy waiting to happen.
Safety hazards: Non-negotiable
If a report identifies active safety hazards that haven’t been addressed, that’s a serious concern about building management regardless of anything else.
The Numbers That Actually Matter
Defect counts are less important than defect costs. A building with 50 minor defects and zero major defects is in better shape than one with 5 minor defects and 1 major structural crack.
When evaluating a building report, focus your attention on:
- Water ingress — the most common and costly category of building defects in NSW apartments
- Structural movement — cracks that are being monitored with tell-tales, or that have changed over time
- Fire safety compliance — defects in fire doors, fire-rated walls, sprinkler systems, or smoke detection
- Common property vs lot property — defects in common property are the owners corporation’s responsibility (and therefore your share), while defects within individual lots are that owner’s problem
A building inspection report is a snapshot. What turns that snapshot into a decision is context: the building’s age, its maintenance history, its financial reserves, and whether the people managing it are taking problems seriously or hoping they’ll go away.