If you are selling a property in Victoria, you may come across the term Section 137B report when preparing your Contract of Sale and Section 32 Vendor Statement.
This can be particularly relevant where the property has building work that may have been carried out without the appropriate building permit or where there are questions about building compliance.
But does every seller need a Section 137B report?
No. A Section 137B report is not required for every property sale.
Whether one is needed depends on the circumstances of the property and the building work carried out.
This article explains what Section 137B means, when it may be relevant and what sellers should consider before putting their property on the market.
What Is Section 137B?
Section 137B of the Building Act 1993 (Vic) relates to certain situations involving building work carried out without a required building permit.
In particular circumstances, a building surveyor may issue a report relating to the building work and the condition of the building.
The report may be relevant when a property is being sold and there is building work that was carried out without the required permit.
The purpose is to provide information about the building work and help address certain compliance issues.
Do All Property Sellers Need a Section 137B Report?
No.
A seller does not automatically need a Section 137B report simply because they are selling a property.
It may become relevant where:
- Building work was carried out without the required building permit
- There is uncertainty about whether building work was authorised
- The property has unapproved alterations or additions
- A building surveyor is involved in addressing the issue
- The circumstances require a report to deal with the building work
If all building work was properly approved and there are no relevant issues, a Section 137B report may not be necessary.
What Type of Building Work Can Cause an Issue?
Potential issues can arise where a property has had alterations or additions such as:
- Extensions
- Renovations
- Decks
- Pergolas
- Garages
- Carports
- Structural alterations
- Other building work
The fact that work has existed for many years does not necessarily mean it was properly approved.
For this reason, sellers should consider checking their records before putting a property on the market.
What If I Do Not Have the Building Permit?
If you cannot find the building permit for an addition or alteration, do not immediately assume that the work was unauthorised.
There may be records held by the relevant council or other documents that can help establish what occurred.
A search may be appropriate to determine whether a permit was issued.
Your conveyancer can help identify the property-related searches that may be relevant, while a building professional can advise about the building aspects.
What Is the Difference Between a Section 137B Report and a Building Permit?
They are not the same thing.
A building permit is an approval that authorises certain building work to be carried out subject to applicable requirements.
A Section 137B report may be relevant after building work has already been carried out in circumstances where a required permit was not obtained.
A Section 137B report should not be treated as simply another type of building permit.
The appropriate process depends on the circumstances of the building work.
What If the Property Has Unapproved Building Work?
If you discover that building work may have been carried out without the required approval, it is important to address the issue before selling if possible.
Depending on the circumstances, you may need to:
- Investigate the building history
- Contact the relevant council
- Obtain records
- Speak with a building surveyor
- Determine whether a report is appropriate
- Consider whether further approval or action is required
Do not wait until just before settlement to discover that there is an unresolved building issue.
Does the Issue Need to Be Disclosed When Selling?
Potential building issues can be relevant to the information that needs to be provided to a purchaser.
A seller has obligations in relation to information provided to a buyer, including information contained in the Vendor Statement and Contract of Sale.
If you know about unapproved building work or other relevant issues, you should raise them with your conveyancer before preparing the sale documents.
Your conveyancer can explain the conveyancing implications, while a building surveyor or other qualified professional can advise on the building compliance issues.
Is a Section 137B Report Part of the Section 32?
A Section 137B report and a Section 32 Vendor Statement are different things.
The Section 32 Vendor Statement provides prescribed information about the property to a prospective purchaser.
Depending on the circumstances, relevant building information or supporting documentation may need to be considered as part of preparing the sale documentation.
If you are unsure what should be included in your Section 32 Vendor Statement, it is important to obtain advice before the property is marketed for sale.
What Happens If the Buyer Discovers Unapproved Building Work?
A buyer may raise questions if they discover building work that appears to have been carried out without the appropriate approval.
This can potentially lead to:
- Requests for further information
- Delays
- Negotiations
- Requests for additional documentation
- Concerns about building compliance
- Contractual issues
The impact depends on the circumstances and the nature of the building work.
It is generally better for sellers to identify potential problems before the property is listed.
Should I Investigate Building Work Before Selling?
If your property has had renovations or additions, it can be worthwhile checking your records before putting the property on the market.
Consider whether you have:
- Building permits
- Plans
- Final inspection certificates
- Occupancy permits
- Council correspondence
- Invoices or documents relating to building work
If you are unsure whether particular work was approved, obtain appropriate advice before preparing your sale documents.
What If I Built a Deck or Pergola Without a Permit?
Whether a permit was required depends on the type of structure, the date the work was carried out and the applicable requirements at the time.
Do not assume that every deck, pergola, shed or other structure required the same approval.
If you are uncertain, speak with the relevant council or a qualified building professional.
Your conveyancer can then consider how the issue may affect the property transaction.
What If the Building Work Was Done Years Ago?
The age of the work does not necessarily resolve the issue.
Older renovations or additions may still need to be investigated if there is no evidence that the required approval was obtained.
The requirements can also depend on the rules that applied when the work was carried out.
If you are selling an older property with historical alterations, it is worth checking the records early.
Can a Conveyancer Prepare a Section 137B Report?
No.
A Section 137B report is a building-related report and is not prepared by a conveyancer.
Where one is required, the appropriate building professional or building surveyor should be involved.
A conveyancer can assist with the property transaction and advise on the conveyancing aspects of preparing the sale documentation.
How Early Should I Check This Before Selling?
Ideally, you should investigate potential building approval issues before the property is listed for sale.
This gives you time to:
- Locate old documents
- Contact council
- Obtain relevant searches
- Speak with a building surveyor
- Address any outstanding issues
- Prepare the sale documentation correctly
Discovering an issue after the property is already under contract can make the situation more stressful.
Common Mistakes Sellers Should Avoid
Assuming Every Renovation Was Approved
Do not assume that previous owners obtained all required approvals.
Waiting Until the Property Is Under Contract
Building issues are better identified before the property is marketed.
Assuming an Old Structure Does Not Matter
The age of a structure does not automatically mean there is no issue.
Treating a Section 137B Report as a Building Permit
They serve different purposes.
Ignoring Missing Documentation
If you cannot find a building permit, investigate whether records are available.
Preparing the Section 32 at the Last Minute
Allow enough time to investigate potential issues before the property is marketed.
Frequently Asked Questions
Is a Section 137B report required for every property sale?
No. It is only relevant in certain circumstances involving building work and compliance issues.
What is Section 137B?
Section 137B of the Building Act 1993 (Vic) relates to certain circumstances involving building work carried out without a required building permit and the use of a report from a building surveyor in addressing the situation.
Do I need a Section 137B report if my property has renovations?
Not necessarily. The need for a report depends on the nature of the renovations, when they were carried out and whether the required approvals were obtained.
Can my conveyancer prepare the report?
No. A Section 137B report is a building-related report and should be prepared by the appropriate building professional or building surveyor.
What if I cannot find the building permit?
You may be able to obtain records from the relevant council or other sources. You should investigate before selling if possible.
Does unapproved building work need to be disclosed?
Potential building issues can be relevant to the information that needs to be provided to a buyer. Discuss any known issues with your conveyancer before preparing the Contract of Sale and Vendor Statement.
Can unapproved building work delay my sale?
It can. Buyers may ask questions or request additional information, and unresolved issues may create delays or negotiations.
Should I check building permits before listing my property?
It can be a very good idea, particularly if your property has had renovations, extensions or other alterations.
How Prox Conveyancing Can Help
At Prox Conveyancing, we assist Victorian sellers with preparing for property sales, including reviewing property information and identifying conveyancing issues that may need to be addressed before the property is marketed.
If your property has had renovations, extensions or other building work and you are unsure whether the appropriate approvals were obtained, contact us early.
We can assist with the conveyancing aspects and, where appropriate, recommend that you obtain advice from a building surveyor or other qualified professional.
Preparing early can help reduce unexpected issues once your property is under contract.
About the Author
Meet Sally
Sally Kwok is a Licensed Conveyancer and the Director of Prox Conveyancing. With more than 16 years of experience in the conveyancing industry, she is committed to helping buyers and sellers navigate Victorian property transactions with confidence. Sally is passionate about providing clear communication, practical guidance and personalised service throughout every stage of the conveyancing process.
👉 Learn more about Sally on our About page.
About Prox Conveyancing
Prox Conveyancing is a Victorian conveyancing practice providing professional conveyancing services for residential property transactions across Victoria. We assist buyers, sellers, investors and families with a wide range of conveyancing matters, delivering personalised service, transparent communication and professional support from contract through to settlement.
👉 Learn more about Prox Conveyancing on our About page.
This article provides general information only and is not legal advice. Every property transaction is unique, and the information above may not apply to your particular circumstances. If you require advice about your specific situation, please contact a qualified legal professional or licensed conveyancer.