OFT lines up owner builders...
October 20th, 2010
…and contractors get caught in the crossfire
The NSW Office of Fair Trading (OFT) is targeting unlicensed building work on owner-builder sites.
In October, investigators from the OFT’s Home Building Service visited 234 owner-builder sites across Sydney to check compliance with home building laws. This resulted in 47 penalty on-the-spot fines for offences relating to unlicensed or uninsured work and improper contracts.
The OFT has highlighted the issue of insurance. It is important that licensed contractors (builders, tradespeople and project managers) who directly contract with an owner-builder for work over $12,000 (including materials supplied by the contractor) must provide Home Owner Warranty Insurance to the owner builder. The minimum cover is now $300,000. Some contractors have not been aware of this and are now facing fines from the OFT: seven contractors have been recently penalised $1500 each for failing to provide home warranty insurance. Additionally, NSW Fair Trading Minister, Linda Burney, says that some of the 12,000 homeowners who obtained an owner-builder permit in the last year, did so in the misguided belief they could avoid laws requiring them to use appropriately licensed builders.
“Regardless of whether you engage a builder to oversee your work, or become an owner-builder, you must still use licensed contractors,” she says. “Six homeowners were penalised $750 each for contracting with an unlicensed builder or tradesperson. This certainly eats into the money they believe they would be saving by becoming an owner-builder and by using cheaper unlicensed traders.” Other penalties included 18 contractors being penalised between $500 and $750 in relation to unlicensed work; and 16 contractors penalised $250 for failing to provide a written contract or the contract having insufficient information.
Click here for the OFT fact sheet.
In October, investigators from the OFT’s Home Building Service visited 234 owner-builder sites across Sydney to check compliance with home building laws. This resulted in 47 penalty on-the-spot fines for offences relating to unlicensed or uninsured work and improper contracts.
The OFT has highlighted the issue of insurance. It is important that licensed contractors (builders, tradespeople and project managers) who directly contract with an owner-builder for work over $12,000 (including materials supplied by the contractor) must provide Home Owner Warranty Insurance to the owner builder. The minimum cover is now $300,000. Some contractors have not been aware of this and are now facing fines from the OFT: seven contractors have been recently penalised $1500 each for failing to provide home warranty insurance. Additionally, NSW Fair Trading Minister, Linda Burney, says that some of the 12,000 homeowners who obtained an owner-builder permit in the last year, did so in the misguided belief they could avoid laws requiring them to use appropriately licensed builders.
“Regardless of whether you engage a builder to oversee your work, or become an owner-builder, you must still use licensed contractors,” she says. “Six homeowners were penalised $750 each for contracting with an unlicensed builder or tradesperson. This certainly eats into the money they believe they would be saving by becoming an owner-builder and by using cheaper unlicensed traders.” Other penalties included 18 contractors being penalised between $500 and $750 in relation to unlicensed work; and 16 contractors penalised $250 for failing to provide a written contract or the contract having insufficient information.
Click here for the OFT fact sheet.
By The Splash Team
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