The below information applies to an owner-builder who proposes to sell their home within 6 years from completion of the owner-builder’s work.
As an owner-builder, if you're planning to sell a home you've built or renovated, you must purchase domestic building insurance for the work you carried out if:
Domestic building insurance protects the purchaser of the property against defects if the owner-builder dies, becomes insolvent or disappears.
You need to purchase domestic building insurance before entering into a contract to sell your property. If the property doesn’t sell, you may be able to cancel the policy and obtain a refund on the premium.
When looking to sell within 6 years from completion of the work, an owner-builder must purchase Home Warranty and include the Notice of Cover and Defects Inspection Report covering work undertaken as an owner-builder in the section 32 statement provided to the purchaser.
You should contact the BPC for more information on this process if it is satisfied that the applicant has, at any time, completed work as an owner-builder and entered into a contract of sale without obtaining the required of an owner-builder.
An applicant will be required to declare this as part of their application. Monetary penalties apply for knowingly making a false or misleading statement to the BPC, or knowingly providing the BPC with false or misleading information.
An owner-builder may also need to obtain home warranty cover for the domestic building work and provide the purchaser with a certificate of cover when the section 32 statement is provided to the purchaser.
When selling an owner-built home within six and a half years, an owner-builder must have home warranty cover that protects the purchaser. You should contact the BPC for more information on this process.
The BPC will not provide a certificate of consent to an owner-builder if it is satisfied that the applicant has, at any time, entered into a contract of sale without obtaining the cover required of an owner-builder.
For domestic buidling work covered by home warranty , you may be directed to return and fix the work or pay for the work to be rectified if significant defects or non-compliances are identified after the property is sold by the owner builder for a period of 10 years after completion of the work.
If an owner-builder sells their home within six and a half years after the domestic building work was completed, the contract of sale must contain certain warranties:
These warranties cannot be excluded or limited by the contract of sale, except in relation to defects that were known, or ought reasonably to have been known, to the purchaser at the time of the sale. The warranties also extend to subsequent owners who acquire the property.
An owner-builder may apply to VCAT for an exemption from any of these requirements if:
A purchaser who finds defective or non-compliant domestic building work not identified in the required Defects Inspection Report is entitled to take legal action against the owner-builder for breach of statutory warranties.
If the defective work was carried out by a registered domestic builder, then you may have the right to take legal action against that builder.
Home Warranty covers defective or non-compliant work performed by an owner-builder not identified in the Defect Inspection Report. BPC can also issue a formal, written direction known as a rectification order to the owner-builder, requiring them to rectify the defect or non-compliance at the owner-builder’s cost. If the owner-builder refuses to comply with the order, BPC can fund the rectification of defects and non-compliances and recover those costs from the owner-builder.
An owner-builder should be aware that engaging an unregistered domestic builder may invalidate Home Warranty cover. This may expose the owner-builder to personal liability for any defects.
You must obtain a detailed defects inspection report that complies with section 137B of the Victorian Building Act 1993 and in line with the BPC’s Owner Builder Defects Inspection report template from a prescribed practitioner regarding the domestic building work.
The defects inspection report must not be older than six months, list all defective or non-compliant work and must include detailed photos and a copy must also be provided to the homebuyer.
Defective or non-compliant work listed in the defects inspection report will be excluded from the policy as the purchaser of the property is aware of the defective or non-compliant works at the time of purchase.
An owner-builder does not need to provide a defects inspection report if they sell their home at least 6 years from the completion date of the works.
