What you must do when engaging a builder
· Check his licence - https://www.fairtrading.nsw.gov.au/help-centre/online-tools/home-building-licence-check
· Request certificates of currency for all his insurances including contract works, Public Liability and Workers Compensation.
What should be included in my Domestic Building Contract?
It is always recommended that you obtain legal advice prior to signing a Domestic Building Contract. One consultation may save you thousands of dollars, stress and pressure on relationships and home life. A benefit of obtaining legal advice from the right lawyer is to ensure that you and your builder both have a clear understanding of what you have agreed upon and that the same is reflected in your Domestic Building Contract. Before you sign your Domestic Building Contract you should make sure that:
Other thinks to know before you signing a contract.
Before you sign any contract with the builder or tradesperson you should:
5 days Cooling Off Period
If you have signed your Domestic Building Contract, you only have five business days after receiving a signed copy to withdraw from the Domestic Building Contract without receiving a penalty, unless you obtained sought legal advice on the contract prior to signing.
What the Builder must do prior to commencing Domestic Building Works.
The Builder must ensure that the site is suitable for the proposed work and that he has obtained the required foundation data information (such as a soil report) that satisfies him enough to proceed with the work. He must also ensure that:
§ he has obtained all building and planning permits (unless otherwise stated in the Domestic Building Contract);
§ he is satisfied with the plans, drawings and specifications (including any specific special requirements) described in the Domestic Building Contract;
§ He must provide you with a copy of the signed contract.within 5 days after you sign it.
§ He must provide you with a Certificate for Home Owners Warranty and can not request a deposit until you have been provided with this.
Prime Cost Items and Provisional Sum Items
Prime cost items and Provisional Sum Items are often misunderstood. It is important that any allowances are not under quoted as this can adversely impact your budget .
Prime Cost is an allowance in the contract for the SUPPLY of necessary items not yet finally selected. It can include fixtures and fittings that are itemised in your Domestic Building Contract but not described or costed. Usually this happens when you don’t stipulate the make,model or exact selection of items prior to signing your Domestic Building Contract and therefore the builder can only give you an estimate on each of those items. A builder must provide proof that evidences the costs of any prime cost item in the Domestic Building Contract.
Provisional sum is an allowance in the contract for the cost of foreseeable necessary works (labour), including the supply of materials not fully described or detailed at the time that the contract commenced, for example joinery items or solar panels. Sometimes,excavation work would be noted as a provisional sum item and building costs could increase if additional excavation work is required as a result of rocks,if not provided for in the soil report to your builder. Alternatively, excavation in rock my be listed in exclusions.
What are liquidated damages (LD).
These are found in construction contract and are the mechanism through which on party can claim monetary compensation for loss or damage that occurs as a result of the other party’s failure to delivery the works under the contract.
As an example, if completion is delayed by reason of the contractor's breach, the contractor will be liable to pay the client a specified sum for each day, week or month during which the delay continues. If you are relying on the builder to complete by the date stipulated in a contract and there have been no variations that add time to this program and you as an example are renting. You will have the additional cost of rent until the project is complete and as such you may like to add this cost into the contract and provide an incentive to the builder to complete on time.
Similarly, in some contract an owner can also be bound by liquidated damages for holding up the construction program.
It was in conversations with Scott Herring, a Cobargo community member, that the Phoenix Shed program was born. We facilitated his idea, of pooling community resources to come up with the Phoenix Shed Workshop, which guided participants through the process of building an 8m x 4m structure. Supported with the generosity of Reece Grants, Building Angels as the licensed builder ran the workshop over the course of several weeks. Read more here.
Last week, we finalised the delivery of 41.85 tonnes of FREE tiles to the Bega Valley Shire to assist those rebuilding after losing their home in the Black Summer Fires. Read more here about how this was made possible.
Understanding your contract, its inclusions, exclusions, and the jargon used is paramount to ensure you manage your budget and you avoid any additional stresses during your re-build. Here we explain a few key elements like Prime Cost versus Provisional Sum and how that can impact your budget; the importance of obtaining a Home Builders Compensation Fund Certificate (also known as Home Owners Warranty) before you pay a deposit; and explore the benefits of Liquidated Damages.
BUILDING ANGELS has launched the BUILDING BACK BETTER program to Support Black Summer Bushfire Victims in the rebuild. The program is designed to offer exclusive discounts from industry partners on building materials with an aim to provide at least $250,000 of discounted products into fire-affected communities.