Buying a renovated home can feel exciting, until you realise the previous owner did the work themselves. Somewhere in the paperwork, one document can reveal whether the renovation was ever properly finished. Have you asked your agent whether the seller was the builder?

What Is a Section 137B Report?

A Section 137B report is a defects inspection report required under Section 137B of the Building Act 1993 in Victoria. The requirement applies when a seller completed renovations as an owner-builder. A sale within six years and six months of finishing the work also triggers the requirement.

Continue reading to learn what the document discloses about a property’s history. The timing of a sale can affect what you’re entitled to see.

Key takeaways

• Renovated homes can carry disclosure requirements many buyers overlook.
• Owner-builders selling within six years and six months face specific rules.
• A required document lists construction completed by the previous owner before the sale.
• Undisclosed defects in the renovation may surface only after settlement.
• Selling owner-built work over $16,000 within the disclosure window requires domestic building insurance.
• A property lawyer can help interpret the document’s contents and limits.
• Buyers who review the paperwork before signing get clearer information about a property.

When the Seller Was the Builder

A freshly renovated home can look appealing, with a new kitchen, bathrooms, and tidy gardens easy to notice before a simpler question comes up. Who built the home? If the seller completed the work as an owner-builder, Victorian law treats the sale differently. A Section 137B report becomes part of the required disclosure. The distinction affects what a buyer is entitled to see before signing.

The Six-Year, Six-Month Rule

Victoria’s Building Act 1993 sets a time limit for owner-built work. A seller who renovated their own home must provide a Section 137B report if they sell within six years and six months of finishing the work. The report can’t be older than six months when contracts are signed. After that time limit passes, the seller doesn’t have to give buyers the report at all.

What the Report Contains

Section 137B requires an independent, registered building practitioner to inspect the owner-builder’s work before a sale proceeds. The practitioner documents what was built and checks it against applicable building standards. Any defects or incomplete items found get recorded in the report. The completed report then attaches to the Section 32 vendor statement provided to buyers before signing.

What Happens Without the Report

Without a Section 137B report, buyers have no independent record of the renovation’s condition before settlement. Structural cracking or incomplete work may surface only after the buyer moves in. The cost of repair then falls on the buyer. A missing report also gives a buyer grounds to reconsider the contract before it becomes binding.

Insurance Rules Tied to the Report

If the owner-builder’s work cost more than $16,000, Victorian law also requires building insurance. The seller must give buyers a certificate proving the insurance exists, along with the report. The insurance covers structural defects for six years and other defects for two years. It protects the buyer if the seller dies, disappears, or can’t pay for repairs. Buyers should check the insurance certificate on their own, separately from the report.

Why a Lawyer’s Review Helps

A Section 137B report can be difficult to interpret without legal context, since some noted defects carry more weight than others. A property lawyer reviews the report alongside the contract of sale and vendor statement together. The combined check confirms that all required documentation is present and consistent. Buyers gain a clearer picture from a joint review than from reading the report alone.

A property lawyer’s review can confirm what a Section 137B report means for your purchase.

Get Help With Your Contract

A Section 137B report gives buyers clearer information before they commit to a purchase. Melissa Barlas, founder of Conveyed in Melbourne, has over a decade of experience in Victorian property law. She has helped buyers work through contracts, vendor statements, and disclosure documents, including Section 137B reports. Buyers reviewing a renovated property purchase can reach out to Melissa Barlas at Conveyed for contract support.

Frequently Asked Questions

What is a Section 137B report?

A Section 137B report is a defects inspection report required under Section 137B of the Building Act 1993 in Victoria. A registered building practitioner prepares the report, documenting building defects found in work carried out by a previous owner-builder.

Who is defined as an owner-builder in Victoria?

A builder is defined as someone registered to carry out domestic building work, while an owner-builder is a person who builds, extends, or renovates their own home without one. Owner-builders take on responsibilities normally held by a licensed builder, including compliance with the Building Act 1993 and the Domestic Building Contracts Act.

When must an owner-builder provide a 137B defects report?

An owner-builder must provide a defects inspection report when selling a property within 6.5 years of completing building work. The report covers structural and non-structural defects and must be no more than six months old at the time contracts are signed.

What does a Section 137B inspection check for?

A Section 137B inspection checks building work against applicable standards and records visible defects or incomplete work. A registered building inspector or licensed building practitioner carries out the inspection before the sale of the property proceeds.

Does every property sale in Victoria need a 137B owner-builder report?

A 137B owner-builder report applies only when the seller completed the work within 6.5 years of the sale. Properties without recent owner-builder work, or those outside the disclosure window, don’t require this report.

How does domestic building insurance relate to a 137B report?

Domestic building insurance applies when owner-builder work exceeds $16,000 in value and the property sells within the disclosure window. The insurance covers structural defects for six years and non-structural defects for two years from completing building work.

Where does the 137B report sit within the contract of sale?

The 137B defects inspection report attaches to the Section 32 vendor statement, forming part of the Section 32 contract of sale documents provided to a buyer before signing.

What happens if incomplete work is found during a 137B inspection?

Incomplete work found during a 137B inspection gets recorded in the defects report alongside other findings. The report becomes part of the disclosure documents a buyer reviews before selling a property proceeds to settlement. Consumer Affairs Victoria outlines these requirements for owner-builders selling a home within 6.5 years of completing building work.