You got your quote -

Now check up on the builder

 
 

NSW Department of Fair Trading License Check

Always check out the builders you are thinking of working with – its easy – The Department of Fair Trading is the body that issues all the types of trade licenses. They also keep and make available any records of defects and warnings a tradesman or company may have in their past. Its really quick. All you need is the name or licence number of the builder.  To access this service Google nsw dft and licence check will come up in the suggestion box (or click on the link below).

 

DFT License Check

 
 

Home Warranty Insurance Eligibility

This is a type of insurance policy that protects the client against faulty work or materials supplied by a builder. Any work (materials and labour) that exceeds $20,000- must have a certificate of insurance purchased to cover the specific project. Don’t be fooled by attempts to break up the job into smaller components that are less then $20,000- each, or separating materials costs from labour costs to avoid needing this insurance. If a problem arises the magistrate at the DFT will just say “Sorry, there’s nothing I can do for you,  you didn’t follow the simple guidelines – next case”

The builder needs to be pre-approved to receive these certificates to the value of a project before they can build. It’s a very difficult policy to qualify for and many builders are not covered (read the DFT warnings – there have been lots of problems with false certificates). This is an important issue - a builder can have a licence but not be able to get this insurance. Ask your builder if they are qualified to receive a certificate for your project when you meet them. Then call and check the policy when you get your copy – it’s standard procedure!

 

 

Once you choose your builder its time to

Look at Contracts

 

  • Any work over $5,000- needs to have a contract.  
  • Work over $20,000 requires a much more involved contract.

 

A company is allowed to produce their own contract – but personally - I would be uncomfortable signing some big document produced by the supplier of a service or product. Unless you are a lawyer, you never know about the fine print or what is missing. You might not care about it so much in the beginning, when all you are focused on is a good price, but there may come a time when you wish you had done the right thing. I like to use the Plain English Contract produced by the Department of Fair Trading (DFT). It is an easy to use document and the process of filling it out helps to educate the client as to their rights and responsibilities as well as what to expect from the building industry in general. There are other contracts produced by the Masters Builders Association or the Australian Institute of Architects etc., but I find them overly complex and tend to be biased to either the Builder or the Architect / Client. In addition it is the DFT that administers the industry so using their contract seems sensible.

The DFT also produces a “Consumer Building Guide – Essential information for anyone building or renovating their home.”

Click on the link below to check out the DFT “Small Jobs Contract”, “Contracts for Large Jobs” and “The Consumer Building Guide”. It’s a great source of trusted information (or Google nsw dft and it will come up). There are heaps of stuff on the same page. The DFT website is the primary source of information about consumers and builders rights and obligations.

 

The Department of Fair Trading

 
Converting your selected tender into

The Primary Contract Document

 

Stick with me here - this is easy and if you get it right, everything else just falls into place.

Here is a quick tip about how to set yourselves up before the contract signing event, so that when it comes time to fill out the contract and sign it - you'll know exactly what is going on. The approach is the same for the “Small Jobs Contract”, but this is specifically set out for the “Contract For Large Jobs.”

The key to this is to get the builder to edit his tender document until it clearly describes the work and financial agreements. He may have won the job with verbal reassurances in response to your questions (that’s OK for the winning stage)– but then get him to reissue the tender with everything written down. You can get involved by making your own additions or modifications and send them to him and request he add them to the tender. Keep doing this until it accurately describes the work and financial agreements. 99% of the time it’s a lot easier then going back to the architect and getting them to make modifications to their plans or specification.

For example, say the architect has noted a kitchen window to be replaced and that is included on the DA stamped plans, but because of budget reasons you have decided not to do that right now.  It’s a lot easier for the Builders Tender to list "Kitchen Window" in its "Exclusions column" then it is to go back to the architect and reissue plans with that modification.

 

By the end of this process you will know this document well, and this revised and edited tender has now become the primary contract document.

 

Here is an example of a tender for a medium sized job that is ready to be attached to a contract

 
 

 

Now you are ready

Filling out & Signing The Contract

 

You come to the contract signing meeting with two copies of the contract and two identical sets of all the paperwork (plans, specification etc. - and the perfected  Builders Tender). One set is for you to archive - the other is for the Builder.

The contract has lots of words and then blank boxes where you fill in specific details. The interplay between all these boxes can become quite complex – not so “Plain English” anymore.

 

The key to simplicity is in the documents you attach to the contract (Clause 1 – Contract Documents).

 

After you list your documents in clause 1 - both you and your builder sign and date the first page of each attached document (the tender & architects plans etc.)and initial each subsequent page. Any modifications on the paperwork (things crossed out on the architects plans etc) need to be initialed and dated by both parties. The documents are now legally included (attached to) the contract.

Now you’ve  nearly finished the entire contract! The rest of the contract is easy. Just write  “AS PER BUILDER'S TENDER.” In the subsequent boxes.

 
  • Excluded Items Schedule - "As per Builder's Tender"
  • Provisional Sums - "As per Builder's Tender"
  • Prime Cost Items - "As per Builder's Tender"
  • Work done and/or materials supplied by the owner - "As per Builder's Tender"
 

Apart from your personal details, the only other thing you will need is to establish the progress claims. The builder should have already finalized this with you before coming to the meeting.

 
A bit of homework between the builder winning the job and
signing the contract really makes a difference.
 

If the initial stages of: 

  • checking your builder's license and history
  • checking his insurance
  • clarifying the tender and
  • educating yourself about the terms of contracting

- causes a collapse in your relationship

- better to find out now then after he has demolished half of your house!!