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owner builders page

Contracts for owner-builders

 

As an owner-builder, you will probably be entering into several contracts with different tradespeople. A Project properly contracted from council to handover will eliminate pitfalls and unknowns and possible save you $1000,s and help to eliminate disputes with trades.

All tradespeople must hold a licence from the Office of Fair Trading for the type of work they are to do (whether they are contracting directly with the owner or have subcontracted through the principal builder).

It is the obligation of the licensed builder or trade contractor to provide a written contract for residential building work where:

i) the contract price exceeds $1,000

ii) if the cost of the labour and materials supplied by the contractor exceeds $1,000.

A written contract is required between the licensed builder/tradesperson and you, the owner-builder for building, renovation, addition or maintenance to any home (including garage and swimming pool).

What information must be included in a contract?

The written contract you sign must contain:

  • the date that it was signed by both you and your contractor
  • your name and the exact name on your contractorís licence card and the licence number
  • a sufficient description of the work to be carried out
  • any plans and specifications attached
  • relevant warranties required
  • the contract price, which must be clearly displayed on the front page and a warning if the contract price is not known or subject to change, together with an explanation of the effect of this provision
  • a check list of 12 items
  • a caution about signing the contract if you cannot answer yes to all items in the check list
  • a note about your entitlement to a copy of the signed contract
  • a note about home warranty insurance
  • an acknowledgment by you that you have read and understood the Consumer building guide and that you have completed the check list it contains and answered  yes to all items on it
  • a clause that states that all plans and specifications for the work to be done under the contract (including any variations to those plans and specifications) are taken to form part of the contract
  • a clause that states that any agreement to vary the contract must be signed by you and your contractor 
  • a clause that states that work, or kit home components, will comply with the Building Code of Australia, to the extent required under the Environmental Planning and Assessment Act 1979 including any instrument made under that ACT and all other relevant codes, standards and specifications that the work is required to comply with under any law and the conditions of any relevant development consent or complying development certificate
  • a clause that states that the contract may limit the liability of the contractor to comply with the clause referred to immediately above if the failure relates solely to a design or specification prepared by or on behalf of you, the owner, or a design or specification required by you if the contractor has advised you in writing that it contravenes the clause referred to immediately above.

If the contract price or the market cost of the labour and materials is more than $12,000 your contract is subject to a cooling-off period of 5 clear business days within which you may cancel the contract.

 The Office of Fair Trading recommends its plain English home building contracts. Two different contracts have been produced to cover all types of residential building work.

Resolving Disputes

If you are involved in a dispute with a contractor or sub-contractor you may seek advice from any of the varous state bodies listed below.

Relevant State Authorities

  • Planning and Land Authority [Australian Capital Terriroty]

     

  • The NSW Office of Fair Trading [New South Wales]

     

  • Building Services Authority [Queensland]

     

  • Planning SA [South Australia]

     

  • WST Building Standards and Regulation [Tasmania]

     

  • Consumer Affairs Victoria [Victoria]

     

  • Builder's Registration Board [Western Australia]

     

  • Departament of Planning and Infrastructure [Northern Territory]


     

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