Whether you’re building a new house or renovating the one you have, the world of planning, designing, building and decorating can be an exciting one. But beyond the building plans, colour palettes and functionality requirements of your space, other items also require your undivided attention.
The truth is, at the beginning of your building or renovating journey there is a crucial, legal to-do-list all enthusiastic builders and renovators need to tick off. After all, no one wants to get midway or to the end of their dream build and be disappointed. So, what items should be on your list of things to do?
Complete a QBCC licence search and ASIC search
Before entering into a contract, it pays to conduct a few simple searches. While it doesn't guarantee the builder or subcontractor’s financial position or their ability to undertake the work efficiently and lawfully, it can confirm:
If they hold the correct licence to carry out the work;
If they have ever been prosecuted;
If they have been issued with a direction to rectify and whether or not they complied;
Their registered business address; and
Who their current director/secretary is and whether this has recently changed.
Use a written contract
Gone are the days of handshakes and verbal agreements. Today projects that involve domestic building work priced at over $3,300 require a written contract. Also, if the work is more than $20,000, then a signed copy of the QBCC-approved Consumer Building Guideis also needed.
When organising a contract, you have a few choices. Firstly, you can head over to the Queensland Building and Construction Commissionwebsite who offer contracts to suit most situations and most importantly, they are compliant with legislation. Alternatively, you can opt to use a contract developed by an industry association; however, you must ensure it complies with Queensland legislation. Should you be unsure, seek legal advice in advance.
Be payment savvy
If you are asked to pay money up front for work, it pays to know where you stand legally. The fact is, you don’t want to end up paying for work that might not get completed. There are specific guidelines in place when it comes to paying a deposit which includes:
For building work which costs $20,000 or more: A maximum deposit of 5% is permitted;
For building work which costs between $3,300 and $19,999: A maximum deposit of 10% is permitted;
For building work which costs less than $3,300: It is recommended that no more than 20% is provided; and
Where more than 50% of the value of the work is to be performed offsite (e.g. kitchen renovations where components are custom made in a factory), a maximum of a 20% deposit is permitted.
If your contract includes progress payments, providing the total amount is more than $3,300, the timing and number of payments is a matter of negotiation between you and the contractor. However, it’s important to understand that progress payments MUST be related to the work performed on site. For example, the contractor cannot claim more than 50% of the contract price, including the deposit until at least 50% of the work has been completed on site.
Do you have questions about building or renovating contracts, payments of something else? Contact our team on (07) 4632 0480 or info@jensenlawyers.com.au.
