A Section 137B inspection report is required under the Building Act 1993 (VIC) for any owner-builder selling a property in Melbourne within 6 years and 6 months of completing the building work. The report is prepared by a Licensed Building Practitioner (LBP) and assesses whether the construction complies with applicable building standards. It documents defects, rates their severity, and provides a clear record for the buyer. If the construction cost exceeds $16,000 AUD, the owner-builder must also secure warranty insurance before selling.
Melbourne's construction industry continues to grow, and owner-built properties make up a notable share of residential construction across the city and its suburbs. Section 137B exists to protect buyers from purchasing homes that may not meet building standards, while also giving sellers a structured way to demonstrate the quality of their work. Whether you built in Craigieburn, Brunswick, Frankston, or any other Melbourne suburb, understanding this requirement is a necessary part of selling your property.
What Is a Section 137B Inspection Report?
The Section 137B inspection report is a formal document prepared by a Licensed Building Practitioner under the Building Act 1993 (VIC). It provides a detailed assessment of an owner-built property, evaluating how the construction measures up to established building standards including the National Construction Code (NCC).
This is not a routine building inspection. It is a legal requirement tied to the sale of owner-built properties and carries specific obligations for both the seller and the inspecting practitioner.
Who Is an Owner Builder?
An owner builder is someone who builds or renovates a residential property on their own land. Unlike commercial builders, owner builders do not construct as a business activity. The key characteristics are:
- The person holds the title to the land
- They build or renovate the property for personal use, not for immediate sale or lease
- They may do the work themselves or manage subcontractors
- An owner builder certificate of consent from the VBA is typically required for work valued over $16,000 AUD
Even if you only managed the project and hired contractors to do the physical work, you are still classified as an owner builder if you held the owner builder certificate of consent.
When Is the Report Required?
The Section 137B inspection report is required when:
- The property was built or renovated by an owner builder
- The sale takes place within 6 years and 6 months of completing the building work
- The building work was carried out under a building permit
If you sell after the 6.5-year period, the report is no longer required. However, if the construction cost exceeded $16,000 AUD, warranty insurance remains compulsory regardless of when you sell within the warranty period.
What the Report Includes
A comprehensive Section 137B inspection report covers the following components:
| What It Contains | Purpose | |
|---|---|---|
| Images of Defects | Clear photographs illustrating each defect found during the inspection | Provides visual evidence that supports the written findings |
| Description of Defects | Detailed written description of each defect and its probable impact on the property | Helps buyers and their advisors understand the severity of each issue |
| Defective Building Elements | Categorised list of defects by building element, such as site drainage, framing, flooring, roofing, and wet areas | Provides a structured overview of where problems exist in the property |
| Minor vs Major Defects | Classification of each defect as either minor or major structural | Allows buyers and authorities to assess the seriousness of each issue |
| Compliance Assessment | Evaluation of the property against the requirements of the Building Act 1993 and the NCC | Confirms whether the building work meets applicable standards |
The report may note that the owner-builder has no obligation to rectify the identified defects before selling. However, buyers will use the report's findings to make informed decisions, and unresolved major defects can significantly affect the sale price and buyer interest.
Where Section 137B Reports Are Used
The Section 137B report serves multiple purposes in Melbourne's property market.
- Owner builder transactions: The primary use, providing buyers with a clear assessment of the construction quality
- Defect inspection: Registered engineers, architects, surveyors, and building inspectors use the report to identify defects in materials and workmanship
- Pre-purchase assessments: Buyers may reference the report when evaluating the property's condition before making a purchase decision
- Warranty inspection requirements: Owner builders may need the report to fulfil warranty inspection obligations under Victorian legislation
How to Obtain Your Section 137B Report
Determine your eligibility
Confirm whether your property sale falls within the 6.5-year window from completion of the owner-built work. If it does, the report is required.
Engage a Licensed Building Practitioner
Contact a qualified building inspector registered with the Victorian Building Authority (VBA). Ensure they have experience with Section 137B inspections specifically.
Provide documentation
Supply the inspector with building plans, permits, certificates, and any relevant construction records.
Undergo the inspection
The inspector will conduct a thorough on-site examination of the property, typically lasting one to three hours depending on the property's size and complexity.
Receive the report
After the inspection, the practitioner prepares the written report detailing all findings, defect classifications, and compliance assessments.
Keep records
Retain a copy of the report and the practitioner's certificate of currency. Both documents must be provided to the buyer at the point of sale.
Costs of Section 137B Inspections in Melbourne
- Starting price: From $800 AUD
- Factors affecting cost: Property size, complexity, number of structures (garages, decks, carports), and accessibility
- Additional costs: Warranty insurance is separate and required if building work exceeded $16,000 AUD
Given that every property is different, it is best to contact us for an exact quotation based on your specific circumstances.
Benefits of the Section 137B Inspection
Beyond meeting the legal requirement, the Section 137B inspection offers practical benefits for sellers.
Pros
- Peace of mind knowing the property has been professionally assessed
- Potential for a higher sale price when buyers see a compliant property
- Early identification of defects that can be fixed before listing
- Full compliance with the Building Act 1993 (VIC), avoiding legal complications
Cons
- Clear, unbiased information about the property's construction quality
- Ability to assess defect severity before committing to a purchase
- Confidence that the property has been evaluated against building standards
- A documented baseline for future warranty claims if needed
Key Takeaways
- Section 137B inspection reports are legally required for owner-built properties sold within 6.5 years of completion in Melbourne.
- The report must be prepared by a Licensed Building Practitioner registered with the VBA.
- It covers defect images, descriptions, severity classifications, building element assessments, and compliance evaluations.
- Warranty insurance is compulsory if the building work cost exceeded $16,000 AUD.
- Starting cost is approximately $800 AUD, varying with property size and complexity.
- Both the report and the practitioner's certificate of currency must be given to the buyer at sale.
- Early inspection allows sellers to address defects and strengthen their sale position.
- The report protects buyers by providing transparent, professional information about the property's condition.
Frequently Asked Questions
QWhat is the Section 137B inspection report?
The Section 137B inspection report is a detailed assessment of an owner-built property in Melbourne. Prepared by a Licensed Building Practitioner, it evaluates whether the property meets established building standards under the Building Act 1993 (VIC) and documents any defects found.
QWho is classified as an owner builder in Victoria?
An owner builder is someone who builds or renovates a residential property on their own land for personal use, not as a business activity. They hold the property title and may do the work themselves or manage subcontractors. An owner builder certificate of consent from the VBA is typically required for work valued over $16,000 AUD.
QWhen is a Section 137B inspection report required?
The report is required if an owner builder plans to sell their property within 6 years and 6 months of completing the building work. If you sell after this period, the report is not required. However, if the build cost exceeded $16,000 AUD, warranty insurance obligations may still apply.
QWhat does the Section 137B inspection report include?
The report includes photographs of defects, detailed descriptions of each defect and its impact, a categorised list of defective building elements, classification of defects as minor or major, and an assessment of compliance with the Building Act and the NCC.
QWhy is the Section 137B report important for property transactions?
The report provides transparency about the condition of an owner-built property, helping buyers understand what they are purchasing. It is a legal requirement that protects both parties and adds confidence that the property meets safety and construction standards.
QHow do I obtain a Section 137B inspection report?
First, confirm that your property sale falls within the 6.5-year window. Then, engage a Licensed Building Practitioner registered with the VBA. They will inspect the property, prepare the report, and issue a certificate of currency. Both documents must be provided to the buyer.
QDo all owner builders need warranty insurance?
If the cost of the building work exceeds $16,000 AUD, owner builders must secure warranty insurance. This is separate from the Section 137B inspection report and applies regardless of whether the report is required.
QHow much does a Section 137B inspection cost in Melbourne?
The starting price is approximately $800 AUD. The final cost depends on the property's size, complexity, number of structures, and accessibility. Contact a Licensed Building Practitioner for an exact quotation based on your property.
QHow long does the Section 137B inspection take?
On-site inspections typically last between one and three hours, depending on the property's size and complexity. The written report is usually delivered within a few business days after the inspection.
QDoes the owner builder have to fix defects identified in the report?
The report may note that the owner builder is not obligated to rectify defects before selling. However, unresolved major defects can reduce the sale price and discourage buyers. Addressing significant issues before listing is generally in the seller's best interest.
QWhy choose Owner Inspections for a Section 137B report in Melbourne?
Owner Inspections provides Section 137B inspection reports prepared by Licensed Building Practitioners registered with the VBA. The team covers Melbourne and surrounding suburbs, delivering accurate, detailed reports that support transparent property transactions.
References and Resources
- Building Act 1993 (VIC) - Victorian legislation governing building standards and owner-builder requirements
- Victorian Building Authority (VBA) - Building practitioner registration and owner-builder information
- Consumer Affairs Victoria - Owner Builders - Owner-builder obligations and warranty insurance requirements
- National Construction Code (NCC) - Building standards applicable to residential construction in Australia
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Selling an owner-built property in Melbourne? Owner Inspections provides Section 137B inspection reports prepared by Licensed Building Practitioners registered with the VBA. We cover Melbourne and all surrounding Victorian suburbs. Get a quote today or call us on 1300 471 805.