Four things you need to consider
- Are you going to be an Owner Builder
- Your Builder is a crucial partner – you need a good one whom you can trust.
- Making changes after building has begun is expensive and can cause delays.
- Insurance, especially against theft and fire, is essential.
Three things you need to look at
- Always check that the builder is following the plans and all materials used are the ones specified and are installed correctly. This is Really important, especially when it comes to the BASIX certificate
- Read Below here. It will help ensure you have a clear understanding with your builder on their background, their skills, the scope of work and that key elements are in place for your project.
- When the work is done and your home is ready, get a Code Compliance Certificate from the council.
Engaging A Builder
What does a builder do?
Many builders today do not do actual building work themselves. Builders or building contractors:
- manage and coordinate home building or renovation projects
- manage the purchase and delivery of materials
- coordinate the work of tradespeople such as plumbers, painters and carpenters involved in the project.
What does a tradesperson do?
A tradesperson has a current licence from NSW Fair Trading to carry out work in a particular field in the home building industry in NSW.
The term tradesperson includes all licensed:
- concreters
- bricklayers
- carpenters
- electricians
- plumbers
- roof tilers
- plasterers
- tilers
- painters
- fencers
- gasfitters.
How to find a builder or tradesperson
Try the following first:
- ask people for their personal recommendations
- ask other people in the industry
- ask the relevant industry association for a list of names
- look for advertisements on television, radio, in home buyer magazines or the local newspaper
- search the Yellow Pages or other relevant online directories for ‘building contractors’, ‘home improvements’ or specific trade categories.
Project homes
If you choose one of the designs of a builder on display at an exhibition home, then you will probably use that builder. If not make sure you sign a contract that sets out exactly what they are building.
The right tradesperson holds the right licence
You should always check your tradesperson holds the right licence for the job.
NSW Fair Trading research into licensing reveals that some consumers are at risk because they do not actively check that a tradesperson is licensed before they hire. The research shows that 80 percent of homeowners think licensing is important, but only one in 10 go to the Fair Trading’s website to check if a tradesperson is licensed or not.
Go to our home building licence check page or call 13 32 20 to do a free licence check.
Being An Owner Builder
What is owner-builder work?
Owner-builder work is any work, including supervision and coordination of the construction, alterations, repairs or additions to a property:
- where the reasonable market cost (including labour and materials) exceeds $10,000, and
- which relates to a single dwelling-house, dual occupancy* or a secondary dwelling that:
- requires development consent under Part 4 of the Environmental Planning and Assessment Act 1979, or
- is a complying development within the meaning of that Act.
*Note: an owner-builder permit will only be issued regarding a dual occupancy in cases of special circumstances.
Should I do owner-builder work?
An owner-builder permit is for people who have the skill or capacity to build their own house or supervise construction work. While an owner-builder permit is not a builder’s licence, as an owner-builder, you are responsible for the building work as a fully licensed builder would be.
What are my responsibilities?
As an owner-builder, you are responsible for:
- overseeing and supervising all tradespeople
- ordering materials and managing the building site
- obtaining all necessary council and authority approvals
- ensuring that the financial, taxation and insurance requirements of the building work are met and fully comply with all laws
- being aware of your obligations under the Workers Compensation Act 1987 and the Work Health and Safety Act 2011 to provide a safe work environment that complies with SafeWork NSW requirements. Significant penalties may apply if you don’t meet this obligation. Our dealing with hazardous materials page has more information on some possible risks, such as asbestos and lead
- ensuring any contractor engaged is appropriately licensed and insured to do the work contracted for
- warranting that the materials and work will be fit for the purpose and result in a dwelling that can be occupied.
Do I need an owner-builder permit?
An owner-builder permit is not needed when:
- the market value (labour and material) of the residential building work is less than $10,000
- the work does not require development consent.
To be eligible for an owner-builder permit, the development approval must be in respect of a single dwelling-house or a secondary dwelling. In special circumstances dual occupancies may be approved.
An owner-builder permit cannot be issued for:
- renovations to an existing apartment/unit/flat/townhouse within a strata complex
- property not for residential purposes.
How do I get an owner-builder permit?
To get an owner-builder permit, you must lodge an owner-builder permit application either:
- online using the online application form and process that can be found at www.service.nsw.gov.au
- in person at a Service NSW centre. To find out if you’re eligible and to download the relevant owner-builder forms, use the Owner-builder self assessment tool before going to the service centre.
When lodging your application form you must also attach copies of the following documents, together with proof of identity requirements and the owner-builder permit application fee:
- Evidence of ownership or a registered lease with Land and Property Information
- Development consent (development application (DA) approval or complying development certificate (CDC) approval) from a certifying authority (council or private certifier) for the subject building site
- A current general construction induction training card (within the meaning of the Work Health and Safety Regulation 2011), also referred to as Safework Whitecard or a Safework Statement of Training
- If the work is over $20,000 in value, evidence that you have met the owner-builder education requirement
- All other owners of the land for which an owner-builder permit may apply must also be listed – these other owners will not be able to apply for another owner-builder permit relating to different land for 5 years.
For the current general construction induction training card (Item 3 above), Fair Trading will also accept a Safework Statement of Training, issued within the 60 days prior. This acknowledges that it may take up to 60 days to issue the general construction induction cards once you have completed the relevant training.
Fair Trading will also accept, in certain circumstances, interstate general construction induction training cards or cards issued in NSW under previous arrangements that are recognised under Work Health and Safety laws.
Go to the owner-builder approved education requirement page or the owner-builder equivalent accreditation page for more information.
What are my limitations under the 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
- specialist work such as electrical, plumbing, gasfitting, airconditioning and refrigeration work (unless you hold a licence for such work).
Note: 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, or special circumstances exist.
The usual order of construction is:
- Correct set out of the building
- Excavate the section and lay the foundations
- Pour concrete floors
- Construct the framing
- Put the roof on
- Mount the windows
- Put on the exterior cladding
- Organise plumbing and wiring
- Fit insulation
- Put in the doors
- Interior lining
- Interior plastering and painting
- Interior waterproofing
- Tile floors and walls
- Install cabinets
- Carry out final plumbing and electrical work
- Paint the house and complete any finishing work
- Lay the floor coverings
- Have a glass of champagne – you deserve it!
Note: Some of these may happen concurrently or in a slightly different sequence depending on when trades are available. Except the glass of champagne. You don’t get that until the end.
Keeping records is important
It’s important to keep all relevant records as you build or renovate. Types of records you should keep:
- a copy of the building contract and any variations for the work
- any plans or specifications that go with the contract
- proof of all payments made on the project
- Certificate of insurance under the Home Building Compensation Fund (HBCF) (if the work cost is more than $20,000, including GST, unless exempt) You can find out more about the HBC Scheme and check if you’re covered at www.sira.nsw.gov.au
- other relevant insurance policies
- any additional written warranties or guarantees by the builder or by manufacturers of materials or items supplied by the builder
- a copy of the warranty and/or instruction sheet regarding any anti-termite protection work
- contracts and relevant warranties for any other associated work carried out by contractors other than the principal builder (eg. landscaper, pool builder)
- relevant samples or documents identifying types or brands of main building materials used (eg. kitchen door facings/kitchen bench tops)
- any building, soil, geotechnical reports by the builder, engineer, architect, etc
- any care-and-maintenance manuals provided by the builder and any principal contract for associated work
- all correspondence relating to the building work
- a list of all important phone numbers
- a list of all important dates (e.g. contract and completion date).
Defects and warranties
Closely inspect the finished project and list any items of concern. Contracts for new homes come with a warranty known as the ‘defects and liability period’ (usually 13 weeks for new homes).
Ask your builder for more detail, as the period covered can vary from builder to builder. If you find items of concern, let the builder know in writing and keep a copy. Legally, it’s the contractor’s responsibility to make sure the work is free of major defects for six years after the work is completed and two years for all other defects.
Definition of completed work
The term ‘completed’ has a very important role in the legislation because it marks the beginning of the time periods for statutory warranties and insurance under the Home Building Compensation Scheme. The Home Building Act 1989 has a clear definition of what is meant by ‘completion’.
Residential building work is ‘complete’ when it matches the requirements of the contract.
If there is no contract, or the contract doesn’t specify ‘completion’, the work is regarded as ‘complete’ when it can be used for its intended purpose and is free of major defects. The earliest of the following events can be used to determine when this occurs:
- the date the builder ‘handed over’ the project to the owner
- the date the contractor last carried out work (other than remedying minor defects)
- the date of the issue of an occupation certificate, or
- 18 months after the owner-builder permit was issued (in the case of an owner–builder).
For strata schemes, the date of issue of the occupation certificate that allows occupation and use of the whole building will be the date of completion for strata buildings.
Smoke alarms
Every new house built must be fitted with working and appropriately located smoke alarms that meet Australian Standard 3786. An alarm should be placed on the ceiling in a corridor or area between sleeping and living areas. A smoke alarm is also required in any other storey of the same building, even if it does not contain bedrooms.
Visit the Department of Planning and Infrastructure or Fire and Rescue NSW website for more information on the type, location and number of smoke alarms that are to be fitted to your new home.
Drying out the house
New building materials contain moisture that will eventually dry out. Small cracks may show in brick, timber and plaster-lined areas in the first 12 months. This should not affect the structural reliability but check with an independent building expert if you are unsure about larger cracks or any structural movement.
Brickwork
Minor cracking in a typical brick veneer home will not affect the structural reliability of the building.
To maintain the brickwork on your property:
- stabilise moisture content in and around clay sites by adequate drainage
- make sure trees are planted away from the house
- repair plumbing leaks
- keep a record of the width of any large cracks. If you are unsure about whether or not to be concerned about particular cracks, contact your licensed builder or a structural engineer.
Doors and windows
To maintain your doors and windows:
- tighten any loose screws
- oil or dry lubricate rollers, hinges, locks
- check that doors close properly and their locks work
- clean sliding-door and window tracks.
Walls
Provide more ventilation and heating or sunlight to walls with mildew problems and ensure roof and sub-floor wall vents are not blocked.
Kitchen, bathroom, laundry
To maintain your kitchen, bathroom and/or laundry:
- check care instructions for all surfaces – ie. no excessive heat or weight
- regularly clean exhaust fans and clean taps, shower rose and spouts
- replace and maintain tap washers as necessary.
Roof, gutters, drains
Regularly clean gutters, downpipes and drains to remove leaves, silt or other blockages. If you have any concerns, always use a contractor licensed to carry out roof repairs.
Security
The security of your home is important, you should consider:
- installing deadlocks on windows and doors
- fitting lamps with timers to switch on periodically in your absence
- installing an alarm system or movement sensors to activate lights.
Landscaping
To maintain the grounds of your property:
- guide water drainage away from the house
- ensure adequate drainage of excess water from property to stormwater channels
- place garden beds away from the house walls
- if planting trees with large root systems, keep them well away from house foundations and sewer/stormwater pipes
- slope paths away from the house
- check council requirements for any pools or fencing.
Contracts
Contract essentials
Your chosen builder or tradesperson must give you a written contract if:
- the contract price is over $5,000 (including GST), or
- the contract price is not known, is for the provision of labour and materials by the contractor the reasonable market cost of which is more than $5,000 (including GST).
Jobs worth between $5,000 and $20,000 require a ‘small job’ contract with basic information, while building jobs worth more than $20,000 must be covered by more extensive written contracts.
Small jobs contracts
Residential building work worth between $5,000 and $20,000 must be covered by a ‘small jobs’ contract. The written contract must be dated and signed by, or on behalf of, each party. It may specify that work be paid for at regular intervals. It must contain:
- the parties’ names, including the name of the holder of the contractor licence as shown on the contractor licence
- the number of the contractor licence
- a description of the work
- any plans or specifications for the work
- the contract price if known.
- a ‘quality of construction’ clause that states the work will comply with
- the Building Code of Australia, to the extent required under the Environmental Planning and Assessment Act 1979
- all other relevant codes, standards and specifications that the work is required to comply with under any law
- 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 for failure to comply with the above work compliance clause if the failure relates solely to:
- a design or specification prepared by or on behalf of the home owner (but not the contractor) or
- a design or specification required by the home owner if the contractor has advised the home owner in writing that they go against the ‘work compliance clause’.
Contracts for large jobs
Residential building work worth more than $20,000 requires an extensive home building contract and it must contain:
- the date that it was signed by both you and your contractor
- the parties’ names, including the name of the holder of the contractor licence as shown on the contractor licence. Go to our home building online licence check to make sure the details are correct before you sign a contract.
- a sufficient description of the work to be carried out
- plans and specifications attached
- relevant warranties required by the Home Building Act 1989
- the contract price, which must be prominently displayed on the first page and a warning with an explanation if the contract price is subject to change or if the price is not known
- a clear statement setting out the cooling-off period of five clear business days after being given a copy of the contract where it is valued over $20,000
- a checklist of 14 items
- a caution about signing the contract if you cannot answer yes to all items in the checklist
- a progress payment schedule, which may only include the following types of payments:
- fixed payments to be made following the completion of specified stages of work. Payments must be of a specified amount or percentage of the contract price, and the stages of work must be described in clear and plain language.
- payments to be made as work is performed and costs are incurred (and which may include the addition of a margin), at intervals fixed by the contract or on an ‘as invoiced’ basis. Claims for this second type of progress payment must be supported by invoices, receipts or other documentation.
- a combination of the above two types of payments.
- a termination clause, which must include a statement that the contract may be terminated in the circumstances provided by the general law and that this does not prevent the parties agreeing to additional circumstances in which the contract may be terminated
- a note about your entitlement to a copy of the signed contract within five days of signing
- a note that the contractor must give you an insurance certificate under the Home Building Compensation (HBC) Scheme (formally known as home warranty insurance) if the contract is valued over $20,000
- a statement of acknowledgment by you that you have:
- read and understood the Consumer building guide
- completed the check list and answered yes to all items on it
- a clause that states that all plans and specifications to be done under the contract (including variations) are taken to form part of the contract
- a clause that states that any agreement to vary the contract or any plans and specifications must be in writing and signed by you and your contractor
- a clause that states that the work will comply with:
- the Building Code of Australia, to the extent required under the Environmental Planning and Assessment Act 1979
- all other relevant codes, standards and specifications that the work is required to comply with under any law
- 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 for failure to comply with the above work compliance clause if the failure relates solely to:
- a design or specification prepared by or on your behalf of the owner or a design or specification required by the owner if the contractor has advised the owner in writing that it contravenes the clause referred to immediately above.
Caution: Check that a certificate of cover is valid by contacting the insurance company shown on the certificate or by using HBC Check.
Important: The builder or tradesperson must give you a copy of the contract within five business days after you sign it (the weekend, NSW public holidays and 27-31 December [inclusive] do not count).
Other things to know before you sign a contract
Before you sign any contract with the builder or tradesperson you should:
- make sure there’s nothing in your contract which makes you responsible for termite control instead of the builder or tradesperson
- ensure that progress payments listed on the contract are for work actually done and not time on the job
- make sure the dollar value placed on each stage of work is realistic
- get more information about insurance from our Insurance page
- be clear about the duration of warranties
- discuss anything you don’t understand with the builder or tradesperson
- not sign if you’re unhappy as you have the right to request changes to the contract
- get legal advice before you make a change to a standard contract or if the builder or tradesperson has amended a standard contract, or included any special conditions.
Arbitration clauses are not permitted in a home building contract and are deemed void.
Important: A licence in the name of an individual does not permit the individual’s company or partnership to make the contract, even if the individual is a director of the company or member of the partnership.
If the company or partnership is making the contract, the company or partnership needs to be licensed in the company or partnership name. Go to www.fairtrading.nsw.gov.au home building online licence check and look up the details of the contractor you are dealing with before you sign the contract.
Don’t sign any contract if it doesn’t meet all the above criteria.
Statutory warranties
The following warranties set out what you are entitled to under the contract between you and your builder and tradesperson.
Even if these warranties are not written into the contract you sign, the law says that they still apply to the work you are having done on your home. Statutory warranties are in effect for six years for major defects and two years for all other defects, commencing from the date when the work was completed.
These warranties are:
- the work will be performed with due care and skill
- the work will be in accordance with any plans and specifications set out in the contract
- all materials supplied will be suitable for the purpose for which they are to be used
- materials will be new, unless otherwise specified
- the work will be done in accordance to, and will comply with, the Home Building Act 1989or any other law
- the work will be done with due diligence and within the time stated in the contract, or otherwise in a reasonable time
- the work will result in a dwelling that is reasonably fit to live in, if the work includes:
- construction of a dwelling
- making of alterations or additions to a dwelling
- repairing, renovation, decoration or protective treatment of a dwelling
- the work and any materials used in doing the work will be reasonably fit for the specified purpose or result that the owner has advised the contractor, while indicating that the owner relies on the contractor’s skill and judgment.
From 29 April 2013, pool owners are required to register their backyard swimming pools in an online register to be provided by the NSW State Government.
Visit the register website at www.swimmingpoolregister.nsw.gov.au and register your pool for free by following the easy registration steps.
The Register will promote pool safety and pool compliance in response to the challenge of reducing the number of deaths and injuries to children in backyard swimming pools in NSW.
The Register will provide pool owners with pool safety checklists to help them to self-assess their pool’s safety. Pool owners will be asked to indicate that, to the best of their knowledge, their swimming pool complies with the Standard applicable to their pool.
There may be a penalty applied to owners who fail to register a swimming pool by 29 October 2013 (penalty notice amount of $220).
Swimming Pools
All outdoor swimming pools and spas constructed or installed after 1st August 1990 must be surrounded by an approved child resistant barrier. The barrier must separate the pool from any residential building situated on the premises. The barrier must be designed, constructed, installed and maintained in accordance with Australian Standard AS 1926 Fencing for Swimming Pools.
It is essential that home owners and occupiers ensure that swimming pool fencing and other barriers are maintained in a good condition. All access gates must be self-closing and self-latching at all times.
Remember, always keep watch when children are in and around water. There is no substitute for constant adult supervision. Children in and around swimming pools and spas should be watched at all times, irrespective of their swimming ability.
Spas
In Australia and overseas there have been fatalities and injuries linked to poorly designed, installed and maintained spas. These usually result from users, particularly children being trapped by the suction outlet systems.
To minimise the risk of injury, NSW Fair Trading has produced a spa pool safety guide. It includes important safety information about the positioning and operation of the suction outlets of spas that certifiers and those involved in building or installing spa pools need to be aware of.
Regulations about Private Swimming Pools (Existing and New)
Tragically, each year children drown in backyard swimming pools. Many more suffer serious injuries or permanent damage as a result of near-drowning experiences.
The Swimming Pools Act 1992 was introduced as a vital step in improving pool safety for children. By ensuring that adequate swimming pool barriers and warning notices the Swimming Pools Act 1992 and other associated legislation aim to prevent future tragedies.
Owner’s Responsibility
The Swimming Pools Act 1992 requires the owner of premises on which a swimming pool is located to ensure that the pool is at all times surrounded by an approved child resistant barrier, which separate the pool from any residential building.
You must ensure that the swimming pool contains within its bounds no structure apart from the swimming pool and such other structures (such as diving boards and pool filtration plants) that are wholly ancillary to the swimming pool.
You must always keep your fence in good repair and gates and doors in good working condition. It is important that you ensure that doors and gates providing access to the swimming pool are kept securely closed at all times when not in actual use.
All pool owners must display a prescribed warning notice in a prominent position in the immediate vicinity of the swimming pool. The sign gives a supervision warning and the details of resuscitation techniques. These signs are available from Council and community organizations such as The Royal Life Saving Society and may also be obtained from pool shops and other outlets. The Cardiopulmonary Resuscitation Guide can be viewed at http://www.resus.org.au.
The requirements for child-resistant barriers on premises where there is a residential building vary according to when the pool was constructed and where the pool is located:
- For pools on residential land constructed after 1 August 1990, the pool must be surrounded by a child-resistant barrier that separates the pool from any residential building situated on the premise and from any place adjoining the premises. The child-resistant barrier must be designed, constructed, installed and maintained in accordance with the Australian Standard for Fences and gates for Private Swimming Pools (AS 1926-1986)
- For pools on residential land constructed before 1 August 1990, the pool must either be surrounded by a child-resistant barrier (as above) or the means of access from the building to the pool must be restricted at all times. The standard for restriction, eg: by a child-safe windows and doors, are set out in the Swimming Pools Regulation 1998.
Under the Act and Regulation special requirements apply to indoor pools, spas, pools situated on premises that have dwellings, movable dwellings, hotels or motels, premises having an area less than 230 square metres, large properties having an area more than 2000 square metres, and properties having frontage to any large body of water.