Monday, 18 March 2013

Building a New Home in Adelaide - The Building Process

Once building work commences on your new home, it is important to understand what you can expect from a builder in terms of inspections and warranties, and what redress is open to you in the unfortunate situation of a dispute arising.  This is the third of three Tradies SA articles that provide new homeowners in South Australia with helpful advice regarding what can be expected during the building of a new home.

Inspections
While your new home is being constructed, there are processes in place to ensure that the work is being carried out to an acceptable standard.  In South Australia, your builder is required to have a Supervisor’s Registration qualification, which means they have the ultimate responsibility for ensuring that all of the work being done is of an acceptable standard.  It may also be the case that the Council will also undertake inspections of the work.

If your builder employs sub-contractors to perform specialist work on your home (i.e., electrical work, plumbing or gas fitting), the builder is responsible for ensuring the quality of their work.  Therefore, any issues regarding the work of sub-contractors should be directed to your builder.

Once building has been completed, your builder is required to certify that the work has been carried out to an acceptable standard.  In some cases, a homeowner may choose to engage an independent consultant to undertake an inspection, either at the time of hand-over, or at times when progress payments are due.  If you opt for this course of action, you should advise your builder that this is your intention, in order to ensure access to the site.

Terminating a contract
In the most extreme circumstances, it is possible for either a builder or an owner to terminate a contract; however, this should not be done without taking legal advice.  Terminating a contract should only happen if your builder has not complied with the relevant provisions of the Building Work Contractors Act 1995, and it should take place prior to their completion of building work.

If you intend to terminate a contract, you must do so in writing.  This can be given to your builder in person, or it must be sent by certified mail.

If a contract is terminated, a Magistrates Court may either:
  • provide for the return of payment of the whole fee paid, or a portion thereof
  • provide for payment to be made to the builder in respect of materials supplied and work completed.
It should be stressed once more, however, that legal advice should be taken before terminating a contract.

Practical completion, final payment and hand-over
When the building work on your new home is complete, as laid out in the building work contract, the building schedule and other relevant documents, your home will be handed over to you by your builder.  Then, a Statement of Compliance must be lodged by your builder with the relevant planning authority,


The final payment should be made when the practical completion occurs and the house is ready to be handed over to you.

After completion of construction
After completion, you should also receive a Certificate of Compliance for all plumbing, gas fitting and electrical work carried out during construction, which certifies that the work was carried out to the appropriate standards.

There is also a requirement that a two-part Statement of Compliance is completed and signed by both the builder and the owner.  The homeowner is required to certify that the work has been completed as outlined in the plans and specifications, while the builder certifies that that the work has been completed in accordance with the appropriate standards.  This Statement should then be lodged with your local authority.

Minor defects
In most instances, there will be a 90-day period, commencing at the time of hand-over, for a homeowner to take note of minor defects that require further attention.  These can be items or issues that either went unnoticed at the hand-over, or have developed subsequently.  Generally, these issues will be dealt with at the conclusion of the maintenance period.

Warranties
Irrespective of the specific details of your contract, the law implies certain warranties on the part of your building work contractor.
These include:

  • all work must be completed to an acceptable standard and in a proper manner, as outlined in the agreed plans and specifications
  • the materials supplied and used should be good and proper materials and fit for purpose
  • all work should comply with statutory requirements
  • if there is no completion period stated in the contract, all work must nevertheless be carried out with due diligence
  • at the completion of the building work, the house should be reasonably fit for human habitation
Disputes and complaints
If your building work contractor performs work or provides materials which do not comply with the above warranties, then your rights have been infringed.

Your contract should include details of how to handle disputes; however, as is the case throughout the entire process, good communication can lead to speedy and equitable resolution of disputes, so should you feel that work has not been completed properly, and/or with improper materials, speak to your builder in the first instance.

If resolution is not possible, seek legal advice or get in contact with the Office of Consumer and Business Affairs.

Summary
  • your builder is responsible for ensuring the quality of the work carried out by sub-contractors and tradesmen
  • you may wish to engage an independent consultant to carry out inspections during, and at the completion of, building
  • if you feel you have sufficient grounds to terminate a contract, seek legal advice
  • you and your builder should sign a Statement of Compliance on completion
  • your contract will entitle you to a maintenance period (usually 90 days)
  • irrespective of the details of your contract, there are statutory warranties in place
  • open communication can help to speed up the resolution of disputes
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