An owner builder can be described as anyone who is involved in coordinating or supervising any work , or carries out any work involved with the construction of a dwelling, alterations or additions to a dwelling, renovation, repair, decoration or protective treatment of a dwelling.
The Home Building Act states that the owner builder has to ;
Be licensed at the time of the proposed work (if the work exceeds a cost of $5000 for labour and materials)
Obtain Home Warranty Insurance if you sell the property up to six years after the work was done
The contractor warrants that:
(a)the work will be performed in a proper and workmanlike
manner and in accordance with the plans and
specifications set out in the contract
(b) all materials supplied by the contractor will be good
and suitable for the purpose for which they are used
and, unless otherwise stated in the contract, those
materials will be new
(c) the work will be done in accordance with, and will
comply with, the Home Building Act or any other law
(d) the work will be done with due diligence and within the
time stipulated in the contract, or if no time is stipulated,
within a reasonable time
(e) if the work consists of the making of alterations or
additions to a dwelling or the repairing, renovation,
decoration or protective treatment of a dwelling, the
work will result, to the extent of the work conducted,
in a dwelling that is reasonably fit for occupation
as a dwelling
(f) the work and any materials used in doing the work
will be reasonably fit for the specified purpose or result,
if the owner expressly makes known to the contractor
or another person with express or apparent authority to
enter into or vary contractual arrangements on behalf of
the contractor, the particular purpose for which the work
is required or the result that the owner desires the work
to achieve, so as to show that the owner relies on the
contractor’s skill and judgment.
These warranties form part of the contract. No provision
of this contract can restrict or remove these warranties.
What Does this Mean for you?
If the property is sold within 6 years the owner builder needs to take out the Home Warranty insurance.
The purchaser will receive insurance if the following occur:
- the work is defective
- a claim is made within the time frame as indicated on the insurance policy
- the owner builder is dead, insolvent or has disappeared
If the owner builder is still around the only course of action is to sue them as long as it is within 7 years of completion of the works and they are still solvent.
If the work was never completed then the 7 years is taken from the time of exchange of contract.
What You Can do to Protect Yourself
- Keep notes of all works carried out
- Keep all receipts and invoices
- Keep all warranties and certificates
- Take photos during construction
- Keep records of licenses and insurances from companies you have engaged for the works
- Get a professional building report done before you sell