Who Pays for a Dilapidation Report in Victoria?

The answer depends on who initiated the report, whether it is a council requirement, and the type of project involved. Here is a clear breakdown of the most common scenarios.

Scenario 1: Homeowner Initiates the Report

When a homeowner independently decides to commission a dilapidation report to protect their property before nearby construction, the homeowner pays. This is the most straightforward scenario.

This typically happens when:

The council has not required a report as part of the neighbouring development permit
The homeowner is proactively protecting their interests before construction starts
The homeowner is concerned about the potential impact of nearby works

While the upfront cost falls on the homeowner, the investment is relatively modest compared to the potential cost of unproven construction damage. See our pricing guide for current Melbourne rates.

Scenario 2: Developer Required by Council

When a local council includes a dilapidation report as a condition of a planning or building permit, the developer or builder usually pays. The permit condition is placed on the developer, making it their obligation to ensure the report is completed.

Common permit condition language includes:

“Prior to commencement of works, the developer must arrange a dilapidation report on all properties within [X] metres of the site boundary”
“A pre-construction dilapidation survey must be completed by a qualified building surveyor and copies provided to the responsible authority”

The developer typically engages the inspector and covers the cost. However, some property owners prefer to engage their own independent inspector for added assurance. In that case, the property owner may bear the cost unless they can negotiate with the developer.

Scenario 3: Government Infrastructure Project

For major government infrastructure projects — such as the Metro Tunnel, North East Link, West Gate Tunnel, level crossing removals, and major road upgrades — the project authority pays for dilapidation reports on all affected properties.

The process typically works as follows:

The project authority identifies all properties within the potential impact zone
Property owners are contacted and access is arranged
A contracted inspection firm completes pre-construction surveys on all identified properties
Post-construction surveys are completed after works finish
All costs are borne by the project authority as part of the project budget

If you believe your property should be included in a government project’s dilapidation survey but has not been, contact the project authority directly. You may also commission your own independent report at your own expense for additional protection.

Scenario 4: Strata and Body Corporate

In strata or owners corporation settings, the payment responsibility depends on what is being surveyed:

Common property— If the report covers common property areas (building exterior, shared structures, car parks), the owners corporation typically pays using its administration or maintenance fund. This requires approval through the committee or a general meeting.
Individual lots— If individual lot owners want their own unit surveyed, they generally bear the cost themselves, unless the owners corporation resolves to fund it collectively.
Developer-required— If a new development near the strata building triggers the need, and the council has imposed a permit condition, the developer pays as described above.

For strata buildings, we recommend engaging a single inspector to survey all affected areas (common property and individual lots) at once. This is more cost-effective and produces a consistent report. Contact us to discuss construction-related dilapidation services for multi-unit properties.

What Does Victorian Law Say?

Victorian legislation does not include a specific provision that assigns payment responsibility for dilapidation reports. The obligation to pay is determined by:

The wording of the planning or building permit conditions
Any contractual arrangements between the parties (e.g., construction contracts, subdivision agreements)
The general principle that the party causing the risk should bear the cost of documenting the baseline

In practice, when a report is mandated by a council, the developer almost always pays. When no mandate exists, the property owner who wants the protection pays for it. Either way, the cost is modest insurance against the potential expense of unresolved construction damage.

In many cases, yes. If construction causes damage to your property and you pursue a claim through VCAT or negotiation, the cost of the dilapidation report can often be included as part of the claim. The report is a reasonable expense incurred to protect your property and establish evidence. However, recovery depends on the outcome of the dispute and the specific circumstances.

When the dilapidation report is a condition of the developer's planning or building permit, the developer is responsible for ensuring the report is completed. In most cases, this means the developer pays for it. However, some permit conditions do not specify who must fund the report, only that it must be done. If there is any ambiguity, it is worth clarifying with your council.

For property investors, the cost of a dilapidation report may be tax-deductible as a property maintenance or management expense. For homeowners using their property as a primary residence, it is generally not deductible. For developers and builders, it is a standard project cost. Always consult your accountant or tax advisor for advice specific to your situation.

Get a Quote for Your Dilapidation Report

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