Practitioner Guide
Practical guidance for solicitors and conveyancers acting for vendors and purchasers in owner-builder matters
The Practitioner's Obligation
It is vital for conveyancers and solicitors acting for both purchasers and vendors to be aware of the numerous responsibilities, risks, and liabilities that arise in connection with owner-builder works. The LPLC has consistently identified owner-builder matters as a significant source of professional liability claims against practitioners.
The obligations under s137B are strict and non-negotiable. A practitioner who fails to identify owner-builder works, fails to advise their client of the applicable obligations, or fails to ensure compliance before exchange may face a professional liability claim if the contract is subsequently voided or if the client suffers loss.
LPLC Risk Alert: Practitioners acting for either vendors or purchasers may face their own professional liability if they have failed to adequately advise their clients on the potential consequences of owner-builder works and s137B. The LPLC recommends developing a specific checklist for owner-builder matters.
Acting for Vendors
When acting for a vendor, the practitioner's primary obligation is to ensure that all s137B requirements are satisfied before the contract of sale is entered into. The following steps should be taken in every vendor matter:
Initial Inquiry — Identify Owner-Builder Works
At the first client meeting, ask specifically about all building works carried out on the property in the past 7 years. Do not rely solely on the vendor's recollection — ask about specific categories of work (kitchen renovations, bathroom renovations, decking, pergolas, extensions, retaining walls, etc.). Ask whether a registered builder was engaged under a major domestic building contract for all works.
Review Building Records
Conduct a search of the relevant council's building permit records and the VBA public register of Certificates of Consent. Note that the VBA register only contains records from 2016 onwards, so council records should also be reviewed for older works.
Assess the Prescribed Period
Determine whether any identified owner-builder works fall within the prescribed period under s137B. Calculate the prescribed period from the date of the Occupancy Permit, Certificate of Final Inspection, or building permit (as applicable).
Advise on Obligations
Advise the vendor of their obligations under s137B, including the requirement to obtain a defects inspection report and (if works exceed $16,000) Domestic Building Insurance. Explain the consequences of non-compliance, including the purchaser's right to void the contract.
Commission Defects Report
Advise the vendor to commission a defects inspection report from a prescribed building practitioner as soon as possible. The report must be no more than 6 months old at the time of exchange. If the property is to be listed for an extended period, a fresh report may need to be obtained.
Obtain Insurance (if required)
If the cost of works exceeds $16,000, advise the vendor to obtain Domestic Building Insurance before the contract is entered into. Ensure the certificate is obtained from an approved insurer.
Include in Section 32
Ensure the defects report and insurance certificate are included in the Section 32 Vendor Statement. Confirm that the report is current (no more than 6 months old) at the time of exchange.
Monitor Report Currency
If the property remains on the market for an extended period, monitor the age of the defects report. If the report is approaching 6 months old, advise the vendor to commission a fresh report before exchange.
Acting for Purchasers
When acting for a purchaser, the practitioner must conduct thorough due diligence to identify any owner-builder works and ensure the vendor has complied with their obligations under s137B. If non-compliance is identified, the practitioner must advise the purchaser of their right to void the contract.
Review the Section 32 for Owner-Builder Documents
Check the Section 32 Vendor Statement for the presence of an owner-builder defects inspection report and (if applicable) a Domestic Building Insurance certificate. The absence of these documents where owner-builder works have been carried out is a red flag.
Search the VBA Public Register
Search the VBA public register of Certificates of Consent to identify any owner-builder permits issued for the property since 2016. This is a useful starting point, but note that the register does not contain all owner-builder works — only those for which a Certificate of Consent was obtained.
Enquire Directly with the Vendor
Instruct the vendor's practitioner to confirm in writing whether any owner-builder works have been carried out on the property within the prescribed period. This creates a paper trail and may give rise to a misrepresentation claim if the vendor provides incorrect information.
Commission Building and Pest Reports
Recommend that the purchaser commission independent building and pest inspection reports. These reports may identify works that are not disclosed in the Section 32 and may reveal potential owner-builder works.
Assess the Defects Report
If a defects report is included in the Section 32, review it carefully. Check that it is no more than 6 months old, that it was prepared by a prescribed building practitioner, and that it covers all owner-builder work on the property.
Advise on Rights if Non-Compliance Identified
If owner-builder works are identified that are not disclosed in the Section 32, or if the required documents are absent or defective, advise the purchaser immediately of their right to void the contract under s137B(3). The purchaser can exercise this right at any time before settlement.
Key Questions to Ask Every Vendor Client
The following questions should be asked of every vendor client as part of the initial instructions process:
Owner-Builder Due Diligence Questions
Have you or anyone else carried out any building works on the property in the last 7 years?
If yes, was a registered builder engaged under a major domestic building contract for all of those works?
Were any of the works carried out by you personally, or by tradespeople you engaged and managed directly?
Was a building permit obtained for any of those works?
Was an Occupancy Permit or Certificate of Final Inspection issued upon completion?
What was the approximate cost of those works (including materials and labour)?
Do you have a Certificate of Consent from the VBA for any of those works?
Have you previously obtained a defects inspection report or Domestic Building Insurance for those works?
Are you aware of any defects in the building works?
On This Page
Two Perspectives
Acting for Vendors
Ensure all s137B requirements are satisfied before exchange. Identify works, commission report, obtain insurance.
Acting for Purchasers
Conduct due diligence to identify owner-builder works. Advise on right to void if non-compliance found.
LPLC Resources
The LPLC provides resources for practitioners on owner-builder obligations:
Visit LPLC website →VBA Register Search
Search the VBA public register of Certificates of Consent as part of every purchaser due diligence. Records available from 2016, retained for 10 years.
Search VBA Register →