An owner-builder is anyone who undertakes building, renovation or maintenance work without engaging a registered builder and/or without obtaining a building permit.
This includes homeowners, handymen, or anyone performing work that normally requires multiple trades.
You’ll need a Section 137B Defects Report if:
- One person performed work normally requiring multiple trades
- You carried out building, renovation or maintenance works
- A builder performed work without a building permit
- You’re selling within 6 years and 6 months of completion of works
- Multiple trades were involved
If the total cost of the work exceeded $20,000, First Resort Home Warranty Insurance (simply referred to as “Home Warranty”) may also be required
Structural Works
Insurance must cover the property for 6 years from the date of completion of works.
Non‑Structural Works
Insurance must cover the property for 2 years from the date of completion of works.
Under the new Home Warranty Insurance Scheme, owner-builders are legally required to provide the buyer, if applicable, with Home Warranty Insurance and must take out a policy if they sell the property within 6 years and 6 months of completing the building work.
You must have obtained an owner builder Certificate of Consent issued by the BPC before carrying out any domestic building works valued at over $20,000.
Permit-exempt non-structural work is explicitly exempt from requiring a building permit under Victorian building regulations and therefore the requirement for a Certificate of Consent only applies if the works exceeds $20,000.
Following the First Resort Home Warranty Scheme introduction on 1st July 2026, it replaces the old Domestic Building Insurance (DBI) rules, they no longer apply. If you choose to sell your home after that date, the authorities will only look at your project through the lens of the new rules.
The new $20,000 threshold applies retrospectively to your past work. If you sell the property after 1st July 2026 the old $16,000 Warranty Insurance threshold no longer applies.
When selling an owner-built home, your legal obligations are determined entirely by the laws in effect on the exact date you SIGN the Contract of Sale with a buyer. Because your contract of sale will be signed after 1st July 2026, the BPC will now only apply the First Resort Home Warranty Scheme rules. The BPC Insurers will look at your project, check to see if it sits below the new $20,000 mandatory insurance limit and if it is below, they will exempt you entirely from the need to take out Warranty Insurance.
It is not uncommon for owner-builders to find themselves stuck in this stressful situation. The BPC approved insurance underwriters are legally blocked from issuing policies for unpermitted or “illegal” building works. There are very few alternative options in order to proceed with the sale.
Call us to discuss this minefield on a case by case basis.
A building permit is generally required when:
- Work involves structural changes
- Work affects health/safety or essential services
Even if you didn’t get a permit, the 137B report is still required.
As previously stated, most non-structural domestic building works such as kitchen renovations, plastering, tiling, or replacing non-load-bearing internal walls etc. are all permit-exempt and do not require a building permit, provided they do not alter the structural soundness of the building, affect fire safety, are built over easements without consent or breach the relevant planning schemes.
You must have obtained an owner builder Certificate of Consent issued by the BPC before carrying out any domestic building works valued at over $20,000.
Permit-exempt non-structural work is explicitly exempt from requiring a building permit under Victorian building regulations and therefore the requirement for a Certificate of Consent only applies if the works exceeds $20,000. Call or email Mark if you require more advice on this.
Yes — if the work you carried out required more than one trade, or if you performed tasks normally done by multiple trades (e.g., plumbing + tiling + waterproofing), you are treated as an owner‑builder. In these cases, a Section 137B report is required when selling within 6 years and 6 months.
Most likely, yes. If the work required a building permit but none was obtained, the law treats the work as owner‑builder work, even if a builder completed it. Selling within 6 years and 6 months of the works triggers the requirement for a Section 137B Defects Report.
If a licensed builder completed the work and is listed on the building permit, a Section 137B Report is generally not required. However, if the builder completed work without a permit, or the permit lists someone else, the work is treated as owner‑builder work and a 137B Report is required.
Multiple trades means more than one trade was involved, or the work required skills from multiple trades even if completed by one person (e.g., handyman). Examples include bathrooms, kitchens, extensions, decks, structural changes, or any project involving plumbing, electrical, tiling, waterproofing, carpentry, etc.
Some standalone jobs completed by one trade only do not require a Section 137B Report — provided they were not part of a larger renovation. Examples include electrical work, plumbing, tiling, painting, plastering, flooring, glazing, and external fixtures.
Certain trades always require a Section 137B Report if no building permit was obtained. These include carpentry, bricklaying, roofing, concreting, stumping/re‑blocking, window/door enlargements, and structural works.
If the work was completed in separate periods and not part of a single project, and each job involved only one trade, a Section 137B Report may not be required. However, if the works collectively form a renovation (e.g., kitchen upgrades done in stages), the report is usually required.
Yes — but only for First Home Warranty Insurance Scheme (simply referred to as “Home Warranty”). If the total cost of the work exceeded $20,000, Home Warranty may be required before selling.
- Structural works → 6‑year insurance from completion date of works/certificate of occupancy
- Non‑structural works → 2‑year insurance from completion date of works
Home Warranty does not determine whether a 137B Report is required.
The report must be dated within 6 months of the contract of sale. Older reports cannot be used and must be re‑issued.
No — cosmetic work such as painting, replacing carpet, installing curtains, or minor decorative upgrades does not require a Section 137B Report, provided it was completed by a single trade and not part of a larger renovation.
We are suitably qualified to complete the 137B Report.
Reports must be completed by a suitably qualified practitioner. Only a Registered Building Inspector, Registered Architect, Registered Buidling Surveyer or Endorsed Registered Engineer can legally complete the 137B Owner Builder Defect Report.
If a required 137B Report is not provided:
- The buyer may delay or refuse settlement
- Your conveyancer may not be able to proceed
- You may face legal or contractual issues
- The buyer may claim defects after settlement
It is a mandatory disclosure document when owner‑builder work has been done within 6 years and 6 months.
Most homeowners misunderstand the rules. If you’re unsure, the safest option is to call Mark for clarity.
📞 0488 137 137