Building or renovating your own home can be one of life’s more chaotic, expensive chapters. This article provides some tips to manage and maintain a working relationship between you and your builder and ensure the process runs somewhat smoothly.
Before you sign the Contract
If you think you have chosen a builder there are two important issues you should look into:
- Is my builder licensed?
- Have any complaints been made against my builder?
The easy way to find the answers to these questions is on the Queensland Building Services Authority (QBSA) website which provides a simple and free search allowing you to check whether your builder holds the appropriate BSA licence and showing details about whether a licensed builder has been subject to any complaints or disciplinary action.
The Domestic Building Contracts Act 2000 (Qld) (DBCA) requires that a written contract must be entered into for any building work valued over $3,300.00
The DBCA also requires that the contract must be in legible English, be signed by the parties and set out:
- all of the terms of your agreement;
- the warranties required under the DBCA;
- the names and addresses of the parties;
- whether or not you are a resident owner;
- the builders BSA licence number;
- the date the contract is made and the commencement and finish dates (or how these are to be calculated);
- a detailed site description;
- any plans and specifications for the works;
- a detailed description of the works;
- the cooling off period under s 72 of the DBCA;
- allowances for delays (i.e. public holidays); and
- the total price and the payment provisions.
Once you have your contract read it carefully to ensure that you understand all of the terms and their effect and ensure that the contract is consistent with any quotes provided by your builder. If you are unhappy with anything in the written contract, ask for it to be changed, and make sure you and your builder initial any changes.
Cooling off Periods
Pursuant to the DBCA you are generally entitled to withdraw from the building contract within 5 business days of receiving a written contract and a BSA approved Contract Information Statement from your builder.
Written notice must be given to the builder of your intention to withdraw from the contract and you will usually be required to pay some costs (such as out of pocket expenses) that may have been reasonably incurred by your builder prior to your withdrawal from the contract.
- If you are obtaining a loan to finance the work, make sure that your contract contains a clause specifying that it is subject to finance.
- Don’t pay the full contract price up front.
- Don’t pay too large a deposit. For work costing more than $20,000.00, the maximum deposit that your builder can ask for is 5%.
- Don’t pay for work in advance or for stages that have not been completed (i.e. don’t make payment for the “frame stage” of your house if the frame is not up yet).
- Don’t pay for variations before work on the variation has commenced.
- Don’t make the final payment unless your builder has reached “practical completion”, which is the stage where the building works have been completed in accordance with the contract (save for minor omissions and/or defects) and the building is reasonably suitable for occupancy.
Problems before completion of the work
Your contract should contain dispute resolution clauses providing steps to follow when you and your builder are disagreeing about matters such as payment or quality of the work.
Be careful to read and understand these clauses and any notice timeframes within them. The BSA approved Contract Information Statement also provides information about the procedures for resolving disputes.
Problems after completion of the work
If you have concerns that the completed building work is defective you can make a complaint to the BSA, who can issue directions to your builder to rectify any defective work.
Strict timeframes apply for complaints to be made to the BSA regarding defective work, so if you think there is a problem, contact the BSA as soon as possible.
The Queensland Civil and Administrative Tribunal (QCAT) has jurisdiction to hear and decide domestic building disputes and is designed to provide a quick and cost effective method of resolving such disputes, including by way of settlement conferences and mediations.
- Visit both the BSA and QCAT websites (www.bsa.qld.gov.au and www.qcat.qld.gov.au ) for free, useful information.
- Do some due diligence on your proposed builder.
- Check your contract documents thoroughly and ensure your written contract complies with the requirements under the DBCA.
- If you are in doubt, seek legal advice. Building or renovating a house is often your biggest investment. “A stitch in time, saves nine” as they say!