Thousands of property owners in Victoria may have been issued with invalid building permits, rendering their assets uninsurable and their homes illegally occupied.

Melbourne's The Age newspaper says more than 3000 property owners in 60 local governments are caught up in the permit debacle, where permits for new homes, pools, sheds, renovations and spas were either invalid or never finalised.

But a spokesman from the Building Commission told Sunrise Exchange News the only permits under scrutiny are those issued by the former building inspector. “It’s not 3000,” she said.

Structures with a building permit – issued to show works meet the stamped plans and Australian Standards – shown to be invalid may not be occupied, covered by insurance, and in some cases bought and sold.

The problem came to light following disciplinary action by the state-based Building Commission against an inspector for issuing “irregular” building permits.

Geoffrey Chambers is alleged to have signed off on 780 permits over an 11-month period from September 2005 for the clients of Casey Building Services in Cranbourne.

The Building Commission is offering free inspections to check the work against the permit documentation and verify the level of compliance and safety.