Step 5: Keeping it legal. Your responsibilities as an owner builder.
This is step 5 in a 10 step process uncovering whether Owner Building is right for you.
As an owner builder you will be subject to the same legal obligations as a full time building practitioner. As such, it’s a good idea to get familiar with the Domestic Building Contracts Act 1995 and the Building Act 1993. We’ll cover the basic here in this post, but these two documents contain the full rundown of all your rights and responsibilities.
Bear in mind that regulations and permits will vary slightly from state to state. We’re covering the basic process as laid out by Consumer Affairs Victoria. Regardless of where you’re at, though, it’s worth a trip to your local council office to have a chat with the Building Authority to make sure you get all your ducks in a row.
Misrepresenting yourself as an owner builder could wind up costing you big bucks in fines.
Since you will be designating yourself as an owner builder on all relevant permits, licences, and inspections, it’s important to first confirm that you are in fact an owner builder.
An owner builder is someone that uses their own skills or manages others to build, extend, or renovate a home that they intend to live in. A registered builder can also be an owner builder, but only on their own property. In order to be designated as an owner builder you must apply for an owner builder permit. You’ll only be approved for one permit for a single home and associated work on that property, once every three years.
If you’re doing the work to make a profit, and not because you intend to reside at the property, then you’re not an owner builder. You could get yourself into a world of hurt by trying to dupe the Building Authority into giving you owner builder status if it’s not true.
One permit down, two more to go before we break ground.
All major building works will require that you first get a planning permit from your local council. So now you’ll have two permits before you tell a single soul what you’re planning to build!
Next, presuming the value of your project will surpass $12,000, you’ll need to apply for a Certificate of Consent from the Building Authority. With Certificate of Consent in hand you’ll have all the documentation you need to start swinging your hammer.
Be sure to engage a building surveyor to complete all relevant inspections both during and after your build.
Building codes and regulations must be adhered to every step of the way. While you’re not legally bound to do so, Consumer Affairs recommends checking the licensing of electricians, plumbers, gasfitters, and any other tradie that requires registration to work in the state. They also recommend signing written contracts with all of your subcontractors.
You’ll also be legally required to conduct inspections after certain stages of your build are complete. Jump through, not around, this bureaucratic hoop. Without a surveyor’s stamp on relevant inspections you’ll never get the Building Authority to issue an Occupancy Permit (new build) or Certificate of Final Inspection (renovation). You’ll need one of these two documents at the end of your project to ensure that the work is legal.
Watch out, your work’s under warranty for 6 years if you decide to sell.
Your legal responsibilities as an owner builder don’t end with the completion of your project. If you sell within six years of obtaining the Certificate of Final Inspection or Occupancy Permit then you’ll need to provide a defects inspection report and purchase domestic builder’s insurance. But don’t look at the warranty as a nuisance, instead see it as one more motivation for doing an awesome job building your own home!
Speaking of insurance, we’ll cover all of the coverage you’ll need to protect your investment and your family’s livelihood in the next post in this series.