Do Your Due Diligence as an Owner Builder

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Do Your Due Diligence as an Owner Builder
Being an owner builder can be a rewarding experience, but it comes with its own set of responsibilities and risks. Keep reading to find out more.
Am I An Owner Builder?
An owner builder is someone who constructs or renovates a building on his or her own land and who is not in the business of building.
As an owner builder, you take on many of the responsibilities of a registered builder and accept any associated financial risks. It’s important to note that most laws that apply to registered builders also apply to owner builders.
Some of the advantages of being an owner builder include:
  • more control over your project, including the design,
  • potential savings as you are not paying the builder’s margin, and:
  • more flexibility over the timeline of your project
Risks include budget and time blow-outs and complex financial and legal situations if your project does not go as expected.
Your rights and responsibilities as an owner builder are governed by the Domestic Building Contracts Act 1995 and the Building Act 1993. A full explanation of these is outlined Owner Builders section of the VBA website . Additional information can also be found on the Consumer Affairs Victoria website under the Home, Housing, Building and Renovating page .
An owner-builder also needs to fulfil the following contractual requirements:
  • Engage a registered building practitioner for all work over $10,000 (unless it is only one of the exempt single trades).
  • Enter into a major domestic building contract for all building work more than $10,000.
  • Ensure the registered building practitioner has warranty insurance cover for all work when it is more than $16,000.
As an owner builder, if you sell your property within 6.5 years after the date of the occupancy permit or the certificate of final inspection then you need to obtain and Owner Builder Defects Report. In addition, you as the the owner builder need to provide the purchaser with the requisite statutory warranty insurance if you sell the home within 6.5 years. It is an offence to sell a building without the required report and insurance.
What is an Owner Builder Defects Report and why is it important?
Under Section 137B of the Building Act 1993, any renovation work that has been completed needs to be inspected by a suitably qualified person.  The Owner Builder Defects Report forms part of your Section 32 documents.  The purpose of the report is to protect both the purchaser and the owner, so they know the condition of the renovated property before a transaction takes place.
The report highlights any faults or defects in the building work, any incomplete work and will identify if second-hand materials have been used. 
Book a Home Inspection Hub Owner Builder Defects Report if you have constructed, renovated, altered, extended, improved or repaired a home or have taken out a permit but had a builder undertake the work.
Some of the types of renovation work we check include:
  • Decks, verandahs or pergolas
  • Carports
  • Extensions
  • Kitchen Renovations
  • Full House Renovations
  • Swimming Pool or Spa Installation
  • Bathroom Renovations
  • Driveways
  • Tiling
  • Fences
  • Garages and Sheds
  • Retaining Walls
Why is an Owner Builder Defects Report with The Hub so important?
An Owner Builder Defects Report can only be provided by a prescribed practitioner. At The Home Inspection Hub, we have a number of suitably qualified inspectors who can inspect your renovation work and prepare the 137B Report.
  • We can prepare the report on our custom-built iPad inspection app and then send the report straight to your conveyancer if necessary.
  • The 137B Report will enable the owner of the property to obtain Builders Warranty Insurance which is required for any domestic work with trade value over $16,000.
  • Under the Building Act, it is an offence to sell your property within the 6.5 year timeframe without a Defects Report and Builders Warranty Insurance. It’s important to note that heavy penalties apply for non-compliance.
In addition, if you fail to provide an Owner Builder Defects Report, the purchaser has the right to pull out of the sale agreement without incurring penalties.
Give us a call on 1300 071 283 or submit a free online quote so we can simplify the process and help you finalise your sale.