Owner builder warranty inspection under Section 137B of the Building Act 1993 (VIC)

Requirements under Section 137B

Section 137B of the Building Act 1993 (VIC) requires owner builders of residential property to obtain a building report which is not less than six (6) months old and provide this to potential purchasers of the property.

Owners builders are also required to obtain domestic building insurance under Section 135 of the Building Act 1993 (VIC) and provide a copy of the certificate of insurance to potential purchasers.

This requirement must be complied with if you sell your property within six(6) years and six (6) months of completing your building. It applies to building a new home, a garage, sheds and verandahs as well as any extensions to the house.

Information to be provided to potential purchasers

It is common for Vendor’s to assume that they fall outside the scope of the relevant legislation because the value of the work is less than $16,000. Where the value of the work is less than $16,000 there is no requirement for insurance, but the warranties set out in Section 137C of the Building Act 1993 (VIC) must be included in the contract of sale and the building report must still be provided to potential purchasers.

Domestic building insurance

Domestic building insurance protects potential purchasers of the property against defects in circumstances where the owner-builder dies, becomes insolvent or disappears.

The domestic building insurance does not cover defects or incomplete work identified in the defects inspection report.

For all further questions and inquiries on building inspection reports and domestic building insurance contact our office on (03) 8590 8370.

This update does not constitute legal advice and should not be relied upon as such. It is intended only to provide a summary and general overview on matters of interest and it is not intended to be comprehensive. You should seek legal or other professional advice before acting or relying on any of the content.

Last updated: 24 July 2020 Article by: Halil Gokler

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