In this paper an analysis of observability and controllability of the electrical part of faulty (non-symmetric) induction machines (IMs) is performed. A two-axis model of healthy or faulty IM is studied and the conditions under which it does not degenerate to a descriptor system are obtained. When degeneration does not occur and stator voltages, stator currents and the rotational angle/speed of the rotor are measured, a fault in the IM does not, in general, render the motor neither unobservable nor uncontrollable. However, it turns out that when the rotor resistance is very small, problems with observability and controllability still may arise.