Jun

26

Owner-Builder

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OWNER – BUILDER

It is not uncommon for building work to be performed on a property by individuals who are not licensed to carry out that building work. Owners of property often renovate or extend their property themselves. In Queensland, owners wanting to undertake building work at their own property must apply for an owner-builder permit from the Building Services Authority (BSA).

An owner-builder permit can only be obtained for the purpose of carrying out building work for a residential dwelling. A permit cannot be obtained to perform work on any commercial or industrial premises or for commercial purposes.

Under an owner-builder permit you cannot carry out building work for a multiple dwelling. A multiple dwelling means a building comprising 2 or more residential units.

As an owner-builder you cannot construct a principal residence and a secondary residence under one owner-builder permit. You can only obtain one permit for one dwelling.

Under an owner-builder permit, the owner is considered to be the principal builder on site; as such it is the BSA’s opinion that owner-builders are entitled to undertake their own design including specifications.

OWNER-BUILDER OBLIGATIONS AT SALE

If you are an owner-builder and you are thinking of selling your property, you may be required by the Queensland Building Services Authority Act 1991 (the Act) and the Queensland Building Services Authority Regulation 2003 (the Regulation) to disclose certain information to prospective buyers.

Recent amendments to the Act provide that if:

  1. building work has been carried out on a property by a person who was not licensed to carry out that building work (i.e. a person with an owner-builder contract); and
  2. that property is offered for sale within six years after the completion of the building work;

the seller must provide prospective buyers with the details of all such building work performed within the six year timeframe and a warning in the form required by regulation, before signing a contract of sale.

If sellers do not provide prospective buyers with a notice of all building work performed under an owner-builder permit and a warning in the form required by regulation, the Act provides that the buyer is provided with a contractual warranty that all building work performed at the Property was carried out properly by an individual who was correctly licensed to perform the building work. The warranty operates to exclude any inconsistent provision in a contract of sale. This means that if no required notice and/or warning has been provided to the Buyer, the contract of sale can be terminated, even if for example the Buyer has waived their right to a building inspection.

 

NOTICE AND WARNING REQUIRED

Under the Regulation anyone selling their property, where building work was performed under an owner-builder contract, must provide a buyer with the following:

  1. A written notice detailing all building work that has been carried out under a owner-builder permit by the person named in the permit; and
  1. A warning that contains the following wording:

“WARNING – THE BUILDING WORK TO WHICH THIS NOTICE RELATES IS NOT COVERED BY INSURANCE UNDER THE QUEENSLAND BUILDING SERVICES AUTHORITY ACT 1991.”

The buyer must be given two copies of the notice and the buyer must sign and return one copy to the seller prior to the contract of sale for the applicable property being signed.

EXAMPLE OF REQUIRED NOTICE

Formal Notice of Owner-Builder Contract

 

This is a formal notice as required under the Queensland Building Services Authority Act 1991.

At the property located at [INSERT ADDRESS] the following work was carried out under an owner-builder contract within the past six (6) years:

  1. …………………………………………………………………………………..
  2. …………………………………………………………………………………..
  3. …………………………………………………………………………………..
  4. …………………………………………………………………………………..
  5. …………………………………………………………………………………..
  6. …………………………………………………………………………………..
  7. …………………………………………………………………………………..
  8. …………………………………………………………………………………..
  9. …………………………………………………………………………………..
  10. …………………………………………………………………………………..
  11. …………………………………………………………………………………..
  12. …………………………………………………………………………………..

WARNING – THE BUILDING WORK TO WHICH THIS NOTICE RELATES IS NOT COVERED BY INSURANCE UNDER THE QUEENSLAND BUILDING SERVICES AUTHORITY ACT 1991.

Sources:  Ferguson Cannon

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Category: Business & Corporate Services, Contract Law, Conveyancing, Fact Finders, General, Property Development

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