General Owner Builder Obligations

Although a number of different laws apply to an owner builder when he or she is preparing to commence their project, under the Home Building Act 1989, an owner builder has a number of legal obligations that generally fall into two categories under that piece of legislation, namely:

contract requirements
licence requirements

Contract Requirements

In relation to the contract requirements, the law requires that when an owner builder engages a builder / contractor to carry out some residential building work, the parties enter into a written contract that complies with the law, when the value of the work to be performed by the builder / contractor exceeds $5,000. Generally, the law requires that the written contract contain details such as the names of the parties (including the builder / contract licence number), a sufficient description of the work to be carried out, the contract price (if known), or if the contract price is not known or can be changed, a warnning that explains why the contract price can be changed, and statutory warranties that are applicable to the proposed work.

An owner builder contract protect himself or herself by using a standard form building contract that already complies with the law.

To read about the different types of home building contracts, CLICK HERE.

Licensing Requirements

An owner builder is also required to ensure that each person who is engaged to carry out residential building work on the site holds the appropriate licence as issued by NSW Fair Trading. If the owner builder fails to do this, then both the owner builder and the person engaged will guilty of an offence under the law.

'Appropriate licence' means that the licence held by a person authorises the person to carry out the proposed work. For example, if a person holds a licence authorising him to carry out 'painting' work, that person cannot also carry out 'plastering' work as well as painting work.

Contravening the licensing requirements in the Home Building Act 1989 can attract heavy penalties, so owner builders should always check the licence of each builder / contractor they engage to carry out residential building work on their project.