Section 137B reports and why Melbourne owner builders need them
The Building Act 1993 Section 137B refers to building works that have been carried out by an owner builder and the owner then wants to sell the home within 6.6 years of the works being completed.
Under the Act, an owner builder who carries out building works on their property and then decides to sell the property within 6 years and 6 months of the works being completed must obtain a 137B defects inspection report (commonly known as a section 137B report).
Who is an owner builder and when is a 137B defect report needed?
An owner builder is defined as someone who “constructs or renovates a domestic building on his or her own land, and who is not in the business of building”. Genuine owner builders do not intend to sell or rent the property immediately and must reside or intend to reside in the dwelling upon completion of the works. The owner builder must also be the owner of the property or the title holder.
Subsection 137B(2) of the Act provides that domestic owner builder obligations arise if a contract to sell is entered into within the prescribed period, which is defined in subsection 137B(7) of the Act as being:
- 6 years and 6 months after the date of completion of the works, where the date of completion of the works, is the date that an occupancy permit has been issued or a certificate of final inspection has been issued;
- 7 years after the date of commencement of the works, which is the date of the issue of the building permit, if neither an occupancy permit nor a certificate of final inspection has been issued; or
- 6 years and 6 months after the certified date of commencement of the works, which is the date that you declare in a statutory declaration to be when the works commenced.
What the section 137B owner builder defect report includes
An owner builders defect report must disclose all the building works the owner builder had completed. It could be any building work not limited to but including, carports, decks, garages, internal renovations, extension or entire homes, including materials used. The report must also disclose any defects, and note incomplete works.
Where is the section 137B report being used?
The section 137B inspection report gets attached to the section 32 contract of sale to legally disclose any owner builders works to potential buyers.
If the value of the building work is more than $16,000, then home owners warranty building insurance must be obtained by the owner builder and a certificate of currency given to the buyer pre-contract. The insurance must cover structural defects for 6.6 or 7 years and non-structural defects for 2 years.
Legally who can carry out house inspections for section 137 B reports?
Only registered building inspectors or surveyors, builders, architects and structural engineers engaged in the building industry.
If you need a reliable 137B owner builder report fast – call us today!
Solid Start Property Inspections services the whole of Melbourne.