Victorian Consolidated Legislation

Building Act 1993 - SECT 137B

Offence for owner-builder to sell building without report or insurance

137B. Offence for owner-builder to sell building without report or insurance



(1) This section does not apply to-

   (a)  the construction of a building (other than a home) by-

   (i)  a registered building practitioner; or

   (ii) an architect registered under the Architects Act 1991; or

   (b)  except as provided in subsection (5), the construction of a home under
        a major domestic building contract; or

   (c)  a building that is exempted from the operation of this section by the
        Victorian Civil and Administrative Tribunal under the
        Domestic Building Contracts Act 1995; or



   (d)  a building to which section 137E applies; or

   (e)  a building to which Part 2 of the House Contracts Guarantee Act 1987
        applies.

(2) A person who constructs a building must not enter into a contract to sell
the building under which the purchaser will become entitled to possess the
building (or to receive the rent and profits from the building) within the
prescribed period unless-

   (a)  in the case of a person other than a registered building practitioner-

   (i)  the person has obtained a report on the building from a prescribed
        building practitioner that contains the matters that are required by
        the Minister by notice published in the Government Gazette; and

   (ii) the person obtained the report not more than 6 months before the
        person enters into the contract to sell the building; and

   (iii) the person has given a copy of the report to the intending purchaser;
        and

   (b)  the person is covered by the required insurance (if any); and

   (c)  the person has given the purchaser a certificate evidencing the
        existence of that insurance; and

   (d)  in the case of a contract for the sale of a home, the contract sets
        out the warranties implied into the contract by section 137C.

Penalty: 100 penalty units.



(3) A contract entered into in contravention of subsection (2) is not void by
reason only of the contravention but is voidable at the option of the
purchaser at any time before completion of the contract.

(4) A person who enters into a major domestic building contract with a builder
for the construction of more than 4 homes may, with the consent of the
builder, apply in writing to the Director of Consumer Affairs Victoria within
the meaning of the Fair Trading Act 1999 to exempt the builder from the
requirement to be covered by the required insurance in respect of that
building work.

(5) If, on an application under subsection (4), the Director of Consumer
Affairs Victoria, in writing, exempts a builder from the requirement to be
covered by insurance in respect of building work-

   (a)  the builder is not required to be covered by the required insurance in
        respect of that building work; and

   (b)  this section (except subsection (2)(a)) applies to the sale of a home
        constructed under that major domestic building contract.

(5AA) A reference in subsection (2) to a person who constructs a building
includes a reference to-

   (a)  a mortgagee in possession of the land on which the building is
        situated; and

   (b)  an executor or administrator of the estate of the person who
        constructed the building.

(5AAB) A mortgagee, executor or administrator referred to in subsection (5AA)
may rely on anything which was done by the person who constructed the building
under subsection (2)(a) in the 6 months before a contract of sale is entered
into by the mortgagee, executor or administrator as if it had been done by the
mortgagee, executor or administrator.

(5A) It is and is to be taken always to have been sufficient compliance with
subsection (2)(c) if a certificate is or was given evidencing the existence of
required insurance in the form of a HIH policy (within the meaning of Part 6
of the House Contracts Guarantee Act 1987) applying to the residence.

(6) This section applies whether or not the construction of the building is
complete at the date of the contract of sale.

(7) In this section-

certified date of commencement, in relation to a building, means the date
certified by the owner of the building by statutory declaration as the date of
commencement of the building work for the construction of the building;

completion date means-

   (a)  the date of issue of the occupancy permit in respect of the building
        (whether or not the occupancy permit is subsequently cancelled or
        varied); or

   (b)  if an occupancy permit is not issued, the date of issue under Part 4
        of the certificate of final inspection of the building work for the
        construction of the building;

construct in relation to a building, means-

   (a)  build, rebuild, erect or re-erect the building; or

   (b)  make alterations to the building; or

   (c)  enlarge or extend the building; or

   (d)  cause any other person to do anything referred to in paragraph (a),
        (b) or (c) in relation to the building; or

   (e)  manage or arrange the doing of anything referred to in paragraph (a),
        (b) or (c) in relation to the building;

home has the same meaning as it has in the
Domestic Building Contracts Act 1995;



prescribed period means-

   (a)  in relation to a contract for the sale of a building on which domestic
        building work has been carried out-

   (i)  6 years and 6 months (or such longer period (not exceeding 10 years)
        as is prescribed) after the completion date for the construction of
        the building; or

   (ii) if neither an occupancy permit nor a certificate of final inspection
        is issued or required to be issued in respect of the construction of
        the building-

                (A)  7 years after the date of the issue of the building
                     permit in respect of the construction of the building; or

                (B)  if a building permit is not issued or required to be
                     issued in respect of the construction of the building, 6
                     years and 6 months after the certified date of
                     commencement for the building; and

   (b)  in relation to a contract for the sale of any other building-10 years
        after the completion date for the construction of that building;

prescribed building practitioner means-

   (a)  an architect registered under the Architects Act 1991; or

   (b)  a building surveyor, building inspector or an engineer registered
        under Part 11; or

   (c)  a person recognised by the Minister under section 28 of the
        House Contracts Guarantee Act 1987 by order in force immediately
        before the commencement of section 166 of the
        Domestic Building Contracts Act 1995.