Last month’s post on Owner Builder Permits referred to recent changes in home building regulations. These changes were directed at the home building industry in general, not just owner builders, but there were a couple of areas that might be worth a little further discussion.
While they came into force several years ago (Jan/Mar 2015), it seems many people were not aware of the impact of these changes. It’s not all bad—there’s a degree of give and take involved. With regard to owner-building, thresholds have been raised but owner-builders must now accept more responsibility.
As previously noted, the threshold for requiring an owner-builder permit has increased to $10,000. All owner-builders must nonetheless undertake basic work health and safety training, and for work over $20,000 an applicant will need to have completed more comprehensive owner-builder training with an appropriately accredited training institution.
Owner-builders are required to name all other owners of the land on an application for an owner-builder permit. This is recorded on the permit to prevent the use of this system to carry out unlicensed commercial building work. Any owners so named cannot apply for another owner-builder permit, for a different property, for 5 years.
As a general rule, an owner-builder permit will no longer be issued for a dual occupancy development. Depending on the types of development permitted in a particular location, this may be a bit of a technical issue, given that a permit can be issued for the construction of a secondary dwelling. The difference is that the former often leads to subdivision and this new restriction is intended to discourage the use of an owner-builder permit where there is no intention of actually living in the subject dwelling.
While contractors working for an owner-builder need to provide certificates for work over $20,000, thus formally accepting responsibliity for their work, owner-builders are not eligible for statutory insurance through the Home Building Compensation Fund. If the subject property is sold within the subsequent warranty period (6 years), the contract for sale must clearly state that there is no statutory insurance on the property and the owner-builder must carry the warranty burden.
For reference, builders must warrant their work for 2 years after completion and for 6 years for ‘major defects’. A ‘major’ defect is a defect occurring in a ‘major element’ of the building that causes or may cause the building or part of it to be uninhabitable, to be unable to be used for its intended purpose or the partial or total collapse or destruction of the building. A major element includes an internal or external loadbearing component and, under the new regulations, fire safety systems and waterproofing.
Once again, you can find more background and detailed information on the above commentary on the NSW Fair Trading website.