If you are selling your property and have had building works constructed by yourself or someone else, you are required to provide a Section 137B Report in the contract of sale.
What is a Section 137B Report?
A Section 137B is an inspection report that discloses if there are any uncompleted works, compliance 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 comply with legislation and be considered a valid report.
Who is the ‘Owner-builder’?
The Building and Plumbing Commission (BPC) defines an owner-builder as “someone who takes responsibility for domestic building work carried out on their own land”. This means even if you have engaged a registered builder to conduct works for you, you are still considered an ‘owner-builder’ despite not doing the works yourself directly.
Building works requiring a Section 137B report include, but are not limited to works on: landscaping, paving, cosmetic works such as cabinetry, driveways, garage, carports, swimming pools and spas, and safety barriers.
Why do I need a Section 137B report?
The Building Act (VIC) 1993 indicates that a Section 137B report is required if the owner-builder is selling an owner-built home that was completed within 6.5 years. The vendor must disclose the Section 137B report in the Section 32.
The report must be 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 is also required to be obtained if the cost of the building project is more than $16,000, and the building project was completed within 6.5 years of the sale date (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 a Contract of Sale and Section 32 that is compliant with legislation to avoid a termination of contract by a purchaser.
Please contact us by email at hello@wlegalgroup.com.au or call us at +61 3 9590 618.
