Updated October 2026
CM Law’s Ultimate List: Top 50 FAQs on Buying a Residential Investment Property #42. Health and Safety
When purchasing a residential investment property in Australia, ensuring compliance with health and safety requirements is essential for protecting both your tenants and your investment. A property’s rental return means little if serious defects make it unsafe or expensive to maintain.
In New South Wales, buyers should investigate fire safety, structural integrity, asbestos, electrical installations and moisture problems before committing. Energy performance also deserves attention: a home that needs excessive heating or cooling can be uncomfortable and costly for tenants and owner-occupiers. The right inspections help you understand both immediate repairs and ongoing expenses.
1. Start with NSW rental property standards
Under the Residential Tenancies Act 2010, landlords must provide premises fit for habitation and maintain them in a reasonable state of repair. The NSW minimum standards cover structural soundness, lighting, ventilation, electricity or gas and adequate sockets, plumbing and drainage, water supply, and private bathroom facilities.
These obligations continue throughout the tenancy. Meeting the seven listed standards does not rule out other conditions making a property unfit. Treat safety complaints as matters requiring investigation, rather than waiting until the next routine inspection.
2. Check smoke alarms and electrical safety
Landlords must ensure appropriately located smoke alarms work on every storey. NSW Fair Trading’s smoke alarm guidance requires annual checks, repair or replacement generally within two business days of discovering a fault, and replacement within ten years of manufacture or earlier if specified by the manufacturer. Conditional strata exceptions require active follow-up; ownership of an apartment does not remove responsibility.
Fire and Rescue NSW states that a working smoke alarm halves the risk of a fatality in a home fire. Keep inspection records and promptly address reported faults.
For electrical safety, arrange a licensed electrician’s assessment where age, visible damage or reported faults warrant it. Electrical wiring work requires an appropriately licensed professional. Faulty electrical installations can require urgent repairs; a general building inspection does not replace specialist electrical assessment.
3. Investigate structural defects and strata records
Cracked walls, movement, corroded fixings and deteriorating balconies deserve proper assessment. Ask the building inspector to identify limitations and recommend a structural engineer where necessary. A cosmetic renovation may conceal defects without correcting their cause.
For apartments, examine strata records for defect reports, fire safety issues, planned repairs, insurance and proposed special levies. A records inspection and physical building inspection answer different questions; both can affect your purchase budget.
New building work must comply with the relevant National Construction Code requirements. As at 20 October 2026, NSW uses NCC 2022 Amendment 2, with NCC 2025 adoption scheduled for 1 May 2027. Confirm the edition and transitional provisions applicable to your approval. This does not automatically require every older home to be rebuilt to current standards.
4. Assess asbestos before renovating
Older properties may contain asbestos in roofing, wall sheeting, eaves or other materials. Do not drill, sand or remove suspect material before obtaining appropriate advice. NSW asbestos guidance for rental properties explains owners’ maintenance responsibilities; undamaged bonded material may sometimes be managed safely in place.
SafeWork NSW requires licensed removal for any friable asbestos or more than 10 square metres of non-friable asbestos, and recommends licensed removal for any amount. Its guidance now refers to the Work Health and Safety Regulation 2025. Workplace duties must be assessed in their proper context, rather than assumed to apply identically to every private home.
5. Find the cause of mould and pests
Water penetration, failed waterproofing and inadequate ventilation can create persistent moisture problems. Painting over stains or repeatedly cleaning mould will not repair a leaking roof. Record what the inspection reveals and obtain estimates for fixing the underlying defect.
Responsibility depends on the cause. NSW mould guidance distinguishes building defects and inadequate ventilation from moisture problems caused by tenant conduct. Similarly, pest responsibilities depend on circumstances such as an existing infestation, defects or tenant activities. Investigate promptly rather than automatically blaming either party. Alleged health effects require appropriate medical evidence.
6. Check energy performance alongside the building contract
An energy assessment can examine insulation, glazing, orientation, ventilation and heating or cooling requirements. SeedHaus’s residential energy reports include NatHERS thermal performance assessments and evaluation of building materials and equipment efficiency. These are technical services, separate from legal contract advice and the certifier’s role.
For relevant NSW projects, BASIX sets water, energy and thermal performance commitments. Ask your technical adviser to check the applicable certificate and design, then have the agreed specifications reflected clearly in the building contract. Clarify responsibility for compliance, product substitutions and variations before signing.
Check what the assessor’s engagement actually covers. Reviewing drawings is different from inspecting installed insulation, checking workmanship or testing a completed building. Ask whether the quoted service includes site visits and what evidence you will receive. A favourable design assessment cannot, by itself, confirm that the builder installed every specified item correctly. Coordinate any construction-stage checks with the builder and certifier so that problems can be raised before relevant work is covered up.
Christine’s experience with third-party checks
“I’m seeing more clients arrange third-party energy checks alongside their building-contract review. Providers such as SeedHaus can assess the technical side. My concern is whether the insulation, glazing and heating or cooling equipment discussed actually appear in the contract and specifications. A beautiful kitchen is lovely, but you do not want to spend every winter paying to heat the street. For an owner-occupier, getting those details right early can mean a more comfortable home and lower running costs long after handover.”
7. Understand the energy-cost context
The IEA’s October 2026 Oil Market Report, published on 14 October, describes fuel supply disruption and higher fuel prices associated with the war involving Iran. This reinforces the practical value of reducing unnecessary energy use, although Australian electricity bills do not move directly in line with oil prices.
Indeed, the Australian Energy Regulator reports that NSW residential Default Market Offer prices decreased by 3.4%–7.7% from 1 July 2026. These are standing-offer price caps, not a guarantee about every household’s bill.
The Australian Government’s Your Home heating and cooling guide shows these uses accounting for around 40% of household energy consumption in its 2019 breakdown. That is context, not a promised saving. Actual savings depend on the building, equipment, tariff and household behaviour. Ask for project-specific comparisons before paying for upgrades.
8. A real case: acting on safety warnings
In Libra Collaroy Pty Ltd v Bhide (2017), a balcony at a rented Collaroy property collapsed in June 2012, injuring four people. Its structural timbers and metal fixings had deteriorated, and there had been repeated warnings about its condition.
The NSW Court of Appeal found that the owners had breached their duty of care. Given the warnings, they should have instructed their managing agent to obtain expert advice and arrange appropriate repairs. Appointing a managing agent did not justify leaving serious concerns unresolved.
The appeal addressed liability and related contribution and indemnity issues; it did not determine a final damages amount. The practical lesson is to document warnings, obtain suitable expert advice and follow through on necessary work.
9. Turn inspection findings into a purchase plan
Before exchanging contracts, obtain the appropriate building, pest and strata reports and investigate their exclusions. Price urgent repairs, specialist assessments and foreseeable maintenance. For a new build, compare the energy assessment with the contract specifications. After purchase, maintain a clear reporting process with your agent and keep evidence that identified risks have been addressed.
Budget for lost rent during repairs and special levies beyond ordinary strata contributions. Check responsibility, approval and funding before relying on the advertised yield.
Contact CM Lawyers for advice on purchase contracts, building contracts and the legal implications of inspection findings before you commit.
Key resources
- NSW Fair Trading — Minimum rental standards: habitability obligations.
- NSW Fair Trading — Smoke alarms and electrical safety: rental maintenance duties.
- Fire and Rescue NSW — Home Safety Visits: smoke alarm safety statistic.
- NSW Government — Buying strata and NCC requirements: due diligence and current code dates.
- NSW Asbestos — Rental properties and SafeWork NSW — Asbestos guidance: management, removal and regulation updates.
- NSW Fair Trading — Mould and pests: responsibility depends on cause.
- NSW Planning Portal — About BASIX: sustainability requirements.
- SeedHaus — Residential energy reports: provider’s description of technical assessment services.
- Your Home — Heating and cooling: household energy breakdown using 2019 data.
- IEA — October 2026 Oil Market Report and AER — Default market offer 2026–27: global fuel disruption and NSW electricity pricing.
- Libra Collaroy Pty Ltd v Bhide (2017): official NSW Court of Appeal judgment.
