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Occupancy permits are documents that signify that a building surveyor is satisfied that the completed building work is suitable for occupation. The Building Act 1993 requires the issue of an occupancy permit prior to occupation of a building where a building permit states that one is required.
When are occupancy permits required?
A building permit will specify whether you require either an occupancy permit or a certificate of final inspection prior to occupation of a building.
Building work for a new home (including units or apartments) will always require an occupancy permit to be issued. It is an offence to occupy a new home that does not have an occupancy permit.
A certificate of final inspection is issued for extensions or alterations to existing homes. Extensions and alterations do not require an occupancy permit as the existing building should already have had an occupancy permit issued on its completion. Again, the requirement for issue of a certificate of final inspection will be indicated on the building permit.
What is the process?
Occupancy permits are issued when your building is considered suitable for occupation. An application for an occupancy permit is made to the relevant building surveyor. In deciding whether to issue an occupancy permit, the building surveyor may request certificates or statements from various practitioners involved in the construction of the building to confirm that the work complies with relevant building legislation.
Occupancy permits and building contracts
Where the value of your building work is more than $5,000 and is being carried out by a builder, the builder must be a registered building practitioner in the appropriate category and/or class and must carry out the work under a major domestic building contract .
With respect to occupancy permits, section 42 of the Domestic Building Contracts Act 1995 sets out the conditions to be
met before a builder can request a final payment from you. The final payment cannot be claimed until the work carried out under the contract has been completed in accordance with the plans and specifications as set out in the contract and the building owner has been given either a copy of the occupancy permit or a copy of the certificate of final inspection. You should read the contract and if you don’t understand it, seek legal advice.
In the case of apartments that are bought off the plan, occupation may still not be possible even if an occupancy permit has been issued for an individual unit. This may be due to contractual arrangements such as completion of the contract and settlement.
You should obtain legal advice to ensure you understand when settlement will occur and whether it is tied to the issuing of an occupancy permit (or the final inspection or some other factor).
What if there is still ongoing building work?
An occupancy permit will be issued to you when the relevant building surveyor is satisfied that items affecting health and safety are in place and fully operational. These include things such as the water supply, smoke alarms, safety glass, handrails and balustrades. It does not mean that all the painting is done, that the carpet is laid or that all the fittings are installed, for example.
For a high-rise apartment, in addition to it being suitable to occupy, an occupancy permit means that the common areas have been made safe and useable, but they may not necessarily have been completed.
The relationship between the occupancy permit and your contract of sale (or domestic building contract) should be clear to you before entering into the relevant contract. If you have any doubts or do not understand the relationship you should obtain legal advice.
Regardless of whether an occupancy permit has been issued, a builder is still responsible for the construction of a building in accordance with the relevant contract and/or approved building permit documents that form part of that contract. It is advisable that you clearly understand your obligations and conditions of contract prior to signing.
For more information regarding contracts made under the Domestic Building Contracts Act 1995. please contact Consumer Affairs Victoria on 1300 558 181.