If you are selling your property and have had building works constructed by yourself or someone who is not a registered builder, you are required to provide a Section 137B Report in the contract of sale.
What is Section 137B Report?
A Section 137B is an inspection report that discloses if there are any uncompleted works, framing issues or any other defects of the building works done by the owner-builder.
Note, the report must be issued by a registered building inspector, surveyor, architect or a structural engineer to ensure valid and legal documentation.
Who is the ‘Owner-builder’?
Victorian Building Authority (VBA) defines the owner-builder “someone who takes responsibility for domestic building work carried out on their own land”. Owner-builders must also follow guidelines such as living (or intending to live) in the property; and not being “in the business of building”, among others.
Building works requiring a Section 137B report include, but are not limited to: landscaping, paving, driveways, garage, carports, swimming pools and spas, and safety barriers.
The owner-builder is also responsible for obtaining the correct building permits, ensuring the works comply with the building regulations, and notifying the VBA of all costs of the building project.
Why do I need a Section 137B report?
The Building Act (VIC) 1993 indicates that a Section 137B report is required in the contract if the building works were completed within the past 6.5 years. The vendor is required to disclose any defects of the building works.
Furthermore, under VBA regulations, if the owner-builder is selling an owner-built home that was completed within 6.5 years, the vendor must disclose the following documents in the Section 32.
- Defects inspection report (137B report)
The vendor must provide the 137B report, issued within less than 6 months from selling the owner-built home. It is requested for any building works done by the owner builder, no matter what the value of the building project is.
- Domestic building insurance (Certificate of Currency)
Domestic building insurance is required if the cost of the building project is more than $16,000, and the building project was completed within 6.5 years (from obtaining the occupancy permit to final inspection certificate issue date). This is to ensure protection for the purchaser in situations where the owner-builders cannot be held immediately accountable (e.g. if they died, disappeared, or became insolvent).
W Legal Group can help!
If you are planning to sell your owner-built home, W Legal Group can help you to prepare the Contract of Sale and Section 32.
Please contact us by email at hello@wlegalgroup.com.au or call us at +61 3 9590 618.
