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owner builders page

 

 

What is an Owner Builder?

An owner-builder is an individual who who takes on the job of managing their own residential building project and performs the coordinating and contracting roles usually undertaken by a builder and holds an Owner Builder permit for that work. An Owner Builder may also perform all or any part of the work themselves apart from those areas which require a seperate license eg; Plumbing & Electrical. An Owner Builder accepts the financial responsibilities and risks for his project. Owner-builder work is any work (including supervising and coordinating) involved in the construction of, or alteration, repair or addition to, a dwelling:

·         where the market value of the work (including labour and materials) is over $5,000; and

·         which relates to a  single dwelling or dual occupancy:

i) that requires development consent under part 4 Environmental Planning & Assessment Act 1979, or
ii) that is a complying development within the meaning of the Act.

The permit is available only to an individual owner of the land (or a person having a prescribed interest in the land eg long term lease) upon which the work is to be carried out.

Only one owner-builder permit can be issued within a five year period, unless the application and any earlier permit relate to

Important. From 29 April 2005, it is an offence under the Home Building Act 1989, for the holder of an owner-builder permit to:

·         knowingly engage an unlicensed contractor 

·         refuse to disclose to a building inspector the names and addresses of persons working on the site.

Go to the following pages for more information about owner-builder work:the same dwelling, or unless special circumstances exist.

What are the limitations of an Owner Builder Permit?

An Owner Builder Permit is not a building licence. It does not allow you to:

·         Do work other than the project covered by the Development Application or Complying Development certificate

·         Do specialist work such as electrical, plumbing, gas fitting, air conditioning and refrigeration work (unless you hold a licence for such work)

Only one Owner Builder Permit can be issued within any five-year period, unless the application and any earlier permit relate to the same land and to related Owner Builder Work, or unless special circumstances exist.

An owner-builder permit is not a building licence. It does not allow you to do:

·         work other than the project covered by the Development Application or Complying Development number

·         specialist work such as electrical, plumbing, gasfitting, air-conditioning and refrigeration work (unless you hold a licence for such work).

 

 

How do I get an owner-builder permit?

You must apply to a Fair Trading Centre and show that you:

·         are over 18 years old

·         own or have a prescribed interest in the land (eg. certificate of title, rates notice)

·         do, or intend to live in the completed home.

You should also provide:

·         a description and address of the proposed work with copy of plans, and

·         council development certificate number or complying certificate number, and

·         an owner-builder permit application fee ($135), and

·         if the value of the proposed work is over $12,000, you must provide evidence you have completed an approved owner-builder course or have the approved equivalent experience. 

For further information on owner-builder courses and details about the qualifications and experience that are equivalent to an owner-builder course, go to the pages on approved courses or approved equivalent qualifications.

Access an application form for an owner-builder permit from the BLIS website.

Owner-builder responsibilities

As an owner-builder, you are responsible for:

  •  overseeing and supervising all tradespeople
  • ordering and delivering of materials, and management of the building site
  • obtaining all necessary council and authority approvals for the work
  • ensuring that the financial, taxation and insurance requirements of the building work are met
  • Ensuring that all relevant laws are complied with.
  • Taking out insurance if you sell your home within seven years of building it.
  • providing a safe work environment
  • ensuring any contractor engaged is appropriately licensed to do the work contracted for.
  • Most Laws and regualtions that apply to a Builder also apply to an Owner Builder.

 

From 29 April 2005, it is an offence under the Home Building Act 1989, for the holder of an owner-builder permit to:

·         engage an unlicensed contractor, unless you can show that you took all reasonable steps to prevent the offence (eg get a copy of their licence or do a licence registration check)

·         refuse to disclose to a building inspector the names and addresses of persons working on the site without a reasonable excuse.

·         Overseeing all aspects of the building process, such as the arrival and departure of tradespeople, ordering and delivery of materials, and management of the building site.
Obtaining all necessary council and authority approvals for the work.
Ensuring that the financial, taxation and insurance requirements of the building work are carried out correctly and fully.

·        Organising, selecting, checking building licences, preparing the contracts, overseeing and supervising all trades people involved in your project

·         Working out quantities, correct ordering, delivery and receiving of the building materials or items needed, as well as the management, safety and security of the building site

·         Obtaining all necessary council and authority approvals as well as paying their fees

·         Ensuring that the financial, taxation and insurance requirements of the building work are fully met, and fully comply with all laws

·         Providing a safe work environment at all times and complying with any WorkCover requirements

·         Ensuring that any contractor engaged to work on your site is appropriately licensed, to do the work contracted for when working on your project, and insured

·         Warranting that the work and materials to comply with Australian Standards, will be fit for the purpose intended and that the work will result in a dwelling fit for occupation

 You have to organise the inspections, the quality control, and supervise and co-ordinate the labour-only subcontractors and suppliers, keeping in close communication with the builder at these stages. If the builder or subcontractors are kept waiting, they might go off to another job and it can be difficult to get them back. The alternative is to pay them for doing nothing while you organise materials, other subcontractors, or building inspections.

You will also have responsibilities for the health and safety on the building site under the Health and Safety in Employment Act, and for all insurance issues.

·          

Important note: Do your financial sums before you start and ask yourself if any savings you hope to make is worth the time and responsibility you must provide, as well as the risk and responsibility of the condition of the building if you sell it within six years after work completion.

From 29 April 2005, new offences have been introduced under the Home Building Act 1989. It is now an offence for the holder of an Owner Builder Permit to:

·        Knowingly engage an unlicensed contractor

·        Lend your permit to another person

·        Refuse to disclose names and addresses of contractors working on site The maximum penalty for these offences is $22,000.



In brief

·         Are you prepared to be responsible for the project?

·         There are tax, insurance and safety issues relating to subcontractors.

·         You need to be familiar with health and safety regulations.

·         Don’t assume that you’ll save a lot of money by DIY-ing.

Thin But the simple fact is: being an owner-builder is not an easy task. It will cost you energy, frustration and - if you don’t get it right - a lot of money. If you are considering building your own house you need to seriously ask yourself whether you have the skills and time available to complete the necessary work.

Consider the following before you launch into DIY:

Subcontractors

If you are building your own house you cannot avoid using subcontractors. Even if you intend to do most of the work yourself there are certain jobs such as plumbing and electrical wiring which by law must be completed by licensed professionals.

This effectively turns you into an employer and you need to be aware of all the associated issues. For instance, you will need to check out GST and PAYG regulations in relation to payment. You also need to organise workers compensation, a long service levy, health and safety levy, and even a training levy.

As you are in charge of the whole project, you need to manage each of the subcontractors working under you. If you have a problem, you must deal with the subcontractors directly. On the other hand, if you employ a builder you are relieved of this responsibility. Provide exact quantities and dates to the subcontractors. Once the trades know that you are serious and organised they will be a lot more helpful. You also may not be able to find tradespeople when you want them at the price you want. Additionally, knowing the standard of workmanship, reliability and trust of a tradesman is very difficult, when you are using them for the first time. A Licnced Builder on the other hand, usually knows his tradesman and the quality of their work.

 

 

How much can I save?

People choose to owner build to save money. Many professionals work on low margins and use their bulk buying power to purchase materials at much cheaper prices. And of course they don’t need to buy or hire their tools. On the other hand a builder is in business to make a profit and by managing the project yourself you can save the builder’s profit margin and the costs of the builders overheads. Most builders work on a profit margin of 10%-20% which on a $200,000 home equates to a saving of $20,000 to $40,000 without taking into account the builders overheads. This could feasible save you double that amount in mortgage payments over a 25 year term. So you’ve saved some money, now what would you  like to do with it? Would you like.......... A Swimming pool?  A Home Theatre? Granite Benchtops & Vanities?  A Rumpus Room?  Enjoy ‘peace of mind’ knowing that you don’t have the stress of a large mortgage in these times ofincreasing interest rates.
 By managing your own building project with Owne  Building Solutions, you will produce a better quality home for a lower cost. The effort you put into your project and the savings you reap become equity, which can help to secure your financial future.

 

 

Australian Capital Territory

Planning and Land Authority

New South Wales

Office of Fair Trading

Queensland

Building Services Authority

South Australia

Planning SA

Tasmania

Department of Infrastructure, Energy and Resources

Victoria

Consumer Affairs Victoria

Western Australia

Builder’s Registration Board

 

The applicant must be an owner of the land and meet the educational requirements of an Owner Builder. A spouse or relative will not be issued with an Owner Builder Permit for their partner’s or family’s land. Also, there are specific rules for applicants where a company owns the land. Contact your nearest NSW Office of Fair Trading on 13 32 20 to find out more.

We conduct NSW Office of Fair Trading approved Owner Builder courses. Information on equivalent qualifications are available from your nearest NSW Office of Fair Trading on 13 32 20 and ask for information sheet FTB23.

If you make a false statement or omit information in an application for an Owner Builder Permit, prosecution can occur under the following sections of the Crimes Act 1900:

·         Section 307A (false or misleading applications)

·         Section 307B (false or misleading information)

Some local councils ask for proof of an Owner Builder Permit or contract with a licensed builder before processing a development application. This is not necessary. Some people may not have yet chosen who is to do the work before it has been approved. A Development Application (DA) number is the preferred evidence of what work is to be or has been approved by council, for which the permit is then issued.

What are the ways to build as an Owner Builder?

The longstanding and traditional Owner Builder way, was to do most of the labour and work yourself, only engaging tradespeople, where a licence was mandatory, such as electrical and plumbing works. Owner Builders often built with mud bricks, straw bale, alternative building materials or pole frame constructions. There are still many people who build this way.

With the collapse, some years ago in New South Wales, of insurance for builders, the NSW Office of Fair Trading formerly introduced an Owner Builder Permit building scheme to organise and legalise the process of building a new home, extension or renovation.Having taken out an Owner Builder Permit in their name, below are some of the main ways that many people build:

·         Act as project managers and perform all the necessary tasks on site, including engaging the tradespeople and ordering materials as necessary

·         Engage, on a contract basis, a licensed “building site foreman” and work with that person to a fulfil the needs outlined above

Enter into a contract with the Licensed Builder, who organise everything and do all the work, who will build their needs in their name and leave the insurance responsibilities and post completion responsibilities and liabilities with the Owner Builder who holds the Owner Builder Permit for the site

 


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