Owner Builder Reports

You must engage a building inspection company to prepare a Defects and Condition Report (also known as a 137B Report), which will identify any defects in workman-ship or materials, as well as the condition and status of any incomplete work.

The Defects and Condition Report must be not more than six months old when you come to sell and should cover all work regardless of value, including extensions, renovations, garages, decking, carports, verandah, swimming pools, etc

The Report forms part of the Section 32, Contract of Sale documentation and must be obtained if the building work is less than 6.5 years from the Occupancy Permit/Final Certificate being issued.

Prior to the Defects inspection being carried out by the building inspector, it is useful to collate your house plans, electrical and plumbing compliance certificates and any mandatory inspection approvals that were issued during the construction process.

You must obtain Warranty Insurance if the value of the domestic building work is over $16,000 and  if the property is being sold within six (6) years of completion.

(Amounts of less than $16,000 require only a Defects Report)

The warranty insurance policy will exclude any incomplete work or defects listed in the Defects Report and you, as the Owner-Builder, will remain liable for those items.

The period of warranty is for six (6) years from the date of the Occupancy Permit or Certificate of Final Inspection being issued.  The warranty protects the purchaser and any successive purchasers for the balance of the six (6) year period and the cover becomes effective once a contract of sale is signed.

The purchaser can only use the insurance if the Owner-Builder has died, becomes insolvent or cannot be found.  The policy covers the costs to repair structural defects for six (6) years and non-structural defects for two (2) years.

If you had a major domestic building contract with a registered building practitioner, the building work will be covered by their domestic building insurance,  however, you will need your own insurance to cover any additional work carried out by you ie. Garages, pergolas, etc

Under the Building Act, it is an offence to sell your property within the six (6) year timeframe without a Defects Report and Warranty Insurance.

Hefty penalties apply.

Furthermore, if you fail to produce the documentation, your hard-won purchaser has the right to pull out of the sale agreement without incurring penalities.