Selling your owner-built or renovated property in Melbourne, Victoria? Understanding the mandatory 137B report could save you from legal complications and hefty fines. This comprehensive guide explains everything you need to know about this essential document.
What is a 137B Report?
A 137B report, also known as an Owner Builder Inspection Report, is a mandatory document required under the Victorian Building Act 1993 for owner-builders in Melbourne. This critical assessment must be provided when selling a property that has undergone construction or renovation within the last 6 years and 6 months.
Ensures Transparency
Provides full disclosure about the condition of owner-built work
Protects Buyers
Safeguards potential buyers from hidden defects
Maintains Standards
Helps uphold building standards across Victoria
Legal Compliance
Ensures owner-builders meet their legal obligations
Legal Requirements and Consequences
The 137B report is not optional—it's a legal requirement that forms part of the Section 32 Vendors Statement. This report must be dated within 6 months of the contract date and prepared by a licensed building practitioner.
Legal Fines
Substantial monetary penalties
Contract Cancellation
Buyer's right to cancel even after auction
Legal Action
Potential lawsuits from buyers
Sale Delays
Contract of Sales incomplete until report is obtained
Who Needs a 137B Report?
An owner-builder is someone who owns the property where building work is performed, undertakes the work themselves, does not hold a building license, and did not engage a Registered Builder for the work performed.
A comprehensive 137B report includes a thorough inspection of structural elements, building components, and identification of any defects. The assessment must be conducted by a qualified building practitioner.
Structural Elements
Foundation and footings assessment
Structural framing evaluation
Load-bearing elements inspection
Building Components
Roofing systems and waterproofing
External cladding and weatherproofing
Internal finishes and fitouts
Defect Identification
Incomplete works
Non-compliant installations
Water ingress issues
Documentation
Detailed written assessment
Photographic evidence of defects
Recommendations for rectification
Warranty Insurance Requirements
If your building work cost exceeds $16,000, you must also provide domestic building insurance (warranty insurance). This insurance protects the purchaser if you cannot be held accountable and can only be obtained with a valid 137B inspection report.
Structural Defects
Coverage for up to 10 years
Non-structural Defects
Coverage for up to 2 years
Incomplete Work
Covers costs to complete unfinished work
Rectification Expenses
Covers repair costs up to policy limits
Common Defects and Preparation
Understanding common defects identified in 137B reports can help you prepare for your inspection. Structural issues, water-related problems, and compliance defects are frequently cited in these reports.
Structural Issues
Foundation settlement or cracking
Inadequate footings for soil conditions
Connection failures in framing
Water-Related Problems
Roof leaks from poor installation
Bathroom waterproofing defects
External cladding water penetration
Compliance Defects
Building code violations
Permit condition breaches
Safety standard failures
Next Steps and Professional Services
To arrange your 137B report, contact Fangs Building Inspections for an obligation-free assessment on whether you need a 137B report. Early planning and professional guidance are key to successfully managing your 137B report requirements.
Only registered building practitioners can prepare a 137B report, including registered building inspectors, architects, structural engineers, and building surveyors. A registered builder cannot perform 137B report inspections.
Schedule and Prepare
Book early to avoid delays, allow extra time for complex properties, and gather all building documentation including permits, engineering certificates, and material specifications.
Consider Additional Requirements
Don't forget related requirements like domestic building insurance (if work >$16,000), electrical safety certificates, plumbing compliance certificates, and energy efficiency declarations.