What are the requirements for an owner-builder to sell an owner-built home?

If you are an owner builder and you intend on selling your property, there are certain requirements you must satisfy under Section 137B of the Building Act 1993 (the Act) before you can sell your property.

There are very strict requirements when an owner builder sells their property within 6 years and 6 months of the date of an issue of certificate of occupancy. The requirements also vary depending on whether the COST of the building works are more than or less than $16,000.00. If the cost of the building work exceeds $16,000.00, then the following must be disclosed by an owner builder in the Vendor’s Statement for sale of the property:

1. A copy of the Building Permit;

2. A Section 137B Condition Report; and

3. A Certificate of Domestic Building Insurance.

The Condition Report on the building works must be obtained from a prescribed building practitioner under Section 137B(7) of the Act. The purpose of the domestic building insurance is to protect a Purchaser in the event that there are defects in the building work. The condition report cannot be more than 6 months old at the date of sale.

If the building works are less than $16,000.00, then the following must be disclosed by an owner builder in the Vendor’s Statement for the sale of the property:-

4. A copy of the Building Permit; and

5. A Section 137B Condition Report from a prescribed building practitioner.

If the building works are less than $16,000.00, proof of insurance is not required to be disclosed to a Purchaser. In order to determine whether the building work exceeds $16,000.00 is not based on what it cost the owner-builder to carry out the works but rather, what it would have cost a registered building practitioner to carry out the building works.

An owner builder failing to disclose the required documents to a Purchaser in a Vendor’s Statement will result in the Vendor’s Statement being defective and will give the Purchaser the right to terminate the Contract at any time until settlement. The owner builder would also be liable for a heavy fine.

If you require advice on the above, please contact Wollerman Shacklock Lawyers on (03) 9707 1155 or email admin@wslegal.com.au.

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