Buying Property For Dummies Read online

  Queensland

  Owner–builders must get a permit for work on their own property valued at $11,000 or more. One of the owner–builders on the title must complete an education course before lodging your application. A list of approved course providers is available on the Building Services Authority website at www.bsa.qld.gov.au. Courses vary in price and duration.

  South Australia

  Owner–builders are required by law to meet the same legislative requirements relating to building work as licensed builders. You must obtain a Development Approval before starting building work, notify the council at the completion of the building work, and submit a signed Statement of Compliance to the relevant authority that issued the Building Rules Consent.

  Tasmania

  Any work you do as an owner–builder valued at over $5,000 requires you to be registered by the Director of Building Control. To register you need to have read the Owner–Builder Kit published by Workplace Standards Tasmania (www.wst.tas.gov.au). The Director of Building Control must verify the eligibility of the owner–builder before a building surveyor can issue a Certificate of Likely Compliance. You are legally responsible for the work for at least six years after it is completed.

  Victoria

  Owner–builders must obtain a Certificate of Consent from the Building Practitioners Board in order to obtain a building permit to carry out domestic building work that costs more than $12,000. You must ensure that the work meets building regulations, standards and other laws, and arrange for building inspections as required by law at particular stages of the building work. It is also recommended that owner–builders complete an owner–builder education course.

  Western Australia

  Owner–builders are required to obtain a licence for works where the costs of labour and material exceed $20,000 from the Builders’ Registration Board (BRB). As an owner–builder you are responsible for the standard of the building work and structural soundness of the building for at least six years after the work is done. In order to obtain the licence, you must fill out a statutory declaration form (available from the local council and the BRB’s website at www.brb.org.au) together with a fee of $126. Owner–builders must also take out home indemnity insurance (see next section).

  Owner–builders can find more information on owner–builder courses and on their responsibilities, and the web addresses of the relevant state and territory bodies, in Chapter 9.

  Taking out home warranty insurance

  As an owner–builder, you must take out home warranty insurance (sometimes called home indemnity insurance) in the event that you sell your home within six and a half years of building it or completing renovations that total more than $12,000 in labour and materials. This insurance protects future buyers of your home from any defective work that was carried out during building or renovating. In New South Wales and Queensland, you need to do an owner–builder course before you can get home warranty insurance.

  Keep all your documentation and certificates, because the insurer may need to see copies of the following:

  Certification in relation to all plumbing and electrical work: Certificates are issued by the relevant state authority to confirm the work adheres to state standards.

  Copy of title of land and a current rates notice: These documents show that the owner–builder owns the property that is now for sale.

  Copy of the building permit: The permit applies to the particular renovation.

  Experts’ reports: These reports indicate the quality and completeness of works undertaken by you as an owner–builder. These experts may include a building surveyor, an architect or an engineer.

  Final inspection certificates: The local council issues these certificates to confirm that the work has been completed according to the contract and to the standards required under the Building Code of Australia.

  Statement in relation to the use of second-hand materials and in relation to incomplete works: Insurers prefer that all materials used in a renovation are new and that the work is complete before granting insurance. However, they may grant exceptions as long as you make clear which materials are second-hand and which aspects of the work aren’t yet complete.

  Calling in qualified tradespeople

  Only qualified tradespeople are permitted to carry out certain work. Plumbing is one, and anything to do with electricals is another. In both cases, the plumber and the electrician need to provide you with a certificate guaranteeing the safety of the work.

  A professional should also do structural work that involves knocking down walls or creating a new structure as part of an extension. For other work, such as building kitchen cabinets, tiling a shower cubicle and even polishing floors, you may theoretically be able to carry out the work yourself. But these jobs require either such precision or they’re so labour intensive, such as in the case of polishing floors, that you may be better off getting an expert in to do the work.

  Not all tradespeople are happy to work for owner–builders. Some complain that owner–builders are poorly organised and difficult to work for. In some cases, tradespeople charge more to work for an owner–builder than they would to work for a professional builder.

  In most states and territories, you need a written Domestic Building Contract for work above a certain value of labour and materials that you hire a tradesperson to carry out. You can get these contracts from legal stationers, the Housing Industry Association (www.hia.com.au) or the Master Builders Australia (www.masterbuilders.com.au). Both these bodies are involved in regulating the building and construction industry in Australia and can provide references to qualified builders and access to documentation like contracts.

  Domestic building contracts can be used for work like concreting, paving, plastering, re-stumping, painting, fencing and landscaping.

  The contract should include the following:

  A detailed description of the work, materials and appliances to be used

  An itemised price list, including GST

  The percentage of the deposit to be paid

  The payment schedule

  A start date

  A finish date

  Do not pay a deposit until work has commenced and do not make any contracted stage payments (also known as progress payments) before a stage is complete, even if you receive an invoice.

  Make sure you receive completion certificates from tradespeople including electricians and plumbers that show that their work complies with current safety standards. The relevant state authority for that trade issues these certificates, and they should include a description of the work and licence details of the tradesperson.

  Acting as project manager

  One option if you want to ‘do it yourself’ is to act as the project manager and hire contractors to do all of the specialist work. In this case, you’re still officially an owner–builder and, as such, you’re liable for responsibility for the work as a whole. However, you can farm out responsibility for specific pieces of work to contractors. You can still also do some of the non-skilled work yourself, like sanding, painting and varnishing, thereby saving money.

  As project manager, you’re responsible for all the financial, regulatory, legal and safety issues associated with your renovation work. Taking on this responsibility requires management and administrative skills, as well as the time to ensure that every part of the process is carried out smoothly and efficiently. (See Chapter 9 for more information on project managing.)

  Hiring Designers and Project Managers

  Sometimes what you need to do to improve a home is clear. Putting in a new window or knocking out a wall may be the obvious solution to bringing in more natural light or opening up a space. Sometimes you may have a more problematic situation that requires a creative solution, or you may need to extend the home, either outwards or upwards, in order to create more rooms or more space. When you have a complex job on your hands, hiring professionals to do the design work for you, or to take on the project management, may be a good so
lution.

  Resolving complex renovation situations

  Using a professional designer, such as an architect, interior designer or a building designer, can be especially helpful if there is anything complicated or controversial about your renovation. Designers are skilled at shaping space and at finding solutions to problems in ways that are as aesthetically pleasing as they’re functional. If they do a lot of work in your particular location, they’re also likely to have a good understanding of how the local planning authorities work, and what needs to be done to get your permit application through the various bureaucratic hoops.

  You can hire a designer just to draw up the plans, which you can then use as owner–builder and project manager. Or you can get the designer to take on the whole job from beginning to end. (For more information on choosing and working with an architect or building designer, see Chapter 9.)

  Architect and/or designer fees cost around 10–15 per cent of the cost of the whole job, so engaging these professionals may be a more expensive option than doing the building or even project managing the renovation yourself; however, you may save yourself a lot of the stress and effort involved in doing it yourself.

  Another way of seeing the light

  When we decided to extend our home to create an extra bathroom and laundry, we envisioned a utilitarian narrow box down the side of our house. Our architect managed to create a beautiful new space that incorporated a whole wall of storage and was flooded with light to become a focal area of our home.

  Handing over the project management

  Architects and building designers can design your renovation around your needs, and they can also manage the whole project, including organising planning and building permits, supervising the builder and tradespeople and ensuring the work is completed right through to the final sign-off. (See Chapter 9 for more on handing over project management.)

  You can also get a builder to project manage the whole job for you. The builder hires, coordinates and supervises all the contractors, and ensures that the job stays on schedule and is completed to an agreed standard of quality.

  Hiring a Builder

  Having a good builder helps smooth the many complications that are often part of a renovation, so shop around for someone you can trust as well as someone who can do the job within your available budget.

  A recommendation from friends is probably the best way of finding a good builder. People readily tell you if they’ve had a bad experience with a builder, and are also happy to recommend someone who has been good. Sometimes the little things can make a difference. For instance, it can be difficult to deal with builders who are surly and uncommunicative, no matter how professional and perfectionist they are in their work.

  An architect or building designer may also recommend a builder he or she has worked with successfully in the past; however, you may still want to seek out quotes from one or two other builders as well. (See the next section for more tips on getting a quote.)

  You can also contact your state or territory Master Builders Australia (www.masterbuilders.com.au) or the Housing Industry Association (www.hia.com.au) to get recommendations of builders in your area. Ask each builder to give you the contact details of previous clients so you can phone them and ask them about their experiences with the builder. If you build up a rapport with some of the previous clients, you may be lucky enough to get invited to their home to have a look at the work they had done and so be able to form your own opinion of the builder.

  Getting a quote

  Ideally, you should get a quote from three different builders. The quote should be as detailed as possible, including information about the materials, fittings and appliances to be installed if, for instance, you’re having a kitchen renovated. Make sure you give each builder exactly the same requirements — the same design and specifying the same materials — so you can make an accurate comparison between each builder’s quote.

  Be aware of the difference between a quote and an estimate. An estimate is often lower than a quote, because a quote builds in contingencies and possible blow-outs. Unless you specify the exact fittings, appliances and materials to be used, the builder may give you a quote based on the cheapest items, which may not be what you want.

  While going with the least expensive quote may be tempting, taking the cheap way isn’t always sensible. Just as important are the quality of the builder’s work, and the nature of your relationship with the builder. Someone who is working at cut-price rates isn’t necessarily going to be happy working for you, and may be reluctant to make any changes to the plans as soon as they start the job.

  Sometimes a builder may try to talk you into becoming an owner–builder, telling you it can save you money. In some cases, they may do so because they’re unregistered and uninsured or don’t want to take on the responsibility of taking out home warranty insurance themselves (refer to the section ‘Taking out home warranty insurance’ earlier in this chapter). You should only become an owner–builder if you’re prepared to take on the full legal responsibility for building your home and managing the contractors and tradespeople yourself.

  Signing the contract

  Make sure you’re happy with a particular builder and have checked out their work and the satisfaction of previous clients before you sign the contract. A contract is a legally binding document and it can be a messy business trying to extricate yourself from your agreement if you realise that the builder isn’t going to do the job to the standard you had hoped for.

  Standard building or home improvement contracts are generally supplied by your state or territory Master Builders Association or Housing Industry Association. The contract sets out the following in detail:

  The work that is required

  Details of fixtures and fittings

  The anticipated construction schedule

  The total contract price

  The deposit required

  A schedule of progress payments to be paid at each stage of construction

  Have your solicitor check over the details of the contract before you sign it to ensure you have legal recourse should you and your builder have any disagreements.

  Any variations you make to the contract subsequent to signing may be expensive because the builder may have already ordered materials or fittings. Try to think of everything before you sign. You may also like to write into the contract a mechanism by which you can make variations.

  Living Through the Building Process

  Because a renovation necessarily involves meshing a new structure into an existing one, with all its quirks and flaws, a renovation often takes a lot longer than building a new home from scratch. Invariably, you’re going to want to make changes to the original plan as you go along. Delays due to bad weather, sick contractors and tradespeople or supplies that just don’t turn up can also drag out the job well beyond the scheduled completion date.

  Any number of factors can slow down a renovation. For example, when we had renovations carried out, the plumber discovered that the sewerage system into which the new shower outlet emptied needed to be completely replaced, and the carpenter found that the floor of the original building was sloping and had to be replaced to match the level of the floor in the new extension.

  If you’re managing the job yourself, expect the delays to be even worse. Unless you’re a gun coordinator and able to put the pressure on contractors to keep to their schedule, you may not be able to get the job moving along as snappily as an architect, project manager or builder can.

  Depending on how big your job is, be prepared for a long relationship with a whole range of tradespeople.

  Moving out until the dust settles

  Even the smallest renovations can be disruptive. Having walls painted and floors polished usually requires you to empty those rooms, for instance. Then there’s the dust and the fumes, not to mention encountering the tradespeople while you’re eating your cornflakes. Tradespeople generally start work just as you’ve dragged yourself out of be
d in your pyjamas to put the coffee on, so you need to be prepared to drop some of your inhibitions, too.

  Unless you can move in with friends or family while you’re renovating, renting adds to your renovation costs. You may also find it difficult to find short-term accommodation at a reasonable price.