Owner Builders and Other Construction Pitfalls

Let me begin by stating that this advice comes from over 38 years of experience in the building design and building construction industry; both in domestic and commercial areas. I have been a Building Designer since 1975, a full member of the Building Designers Association of New South Wales.

I am still a Certified Construction/Building Supervisor (licensed by the NSW Department of Fair Trading).

During 1975 through 1980 I owned a construction company and built over 50 homes, 48 additions and extensions 15 commercial constructions around the Penrith and Sydney areas.

Your first decision is to determine WHO is going to build your project. Will it be a professional licensed builder or owner build? If you are considering building yourself, I recommend you think very carefully. Ask yourself these questions:

  1. Can I build this without the experience of a licensed and certified builder who has four (4) years of full-time study and examinations to become a licensed professional?
  2. Can I handle and supervise all the building trades?
  3. Can I buy and order all the right materials and get it to the building site on schedule?
  4. Can I take time off from work to supervise my project on a full-time basis?
  5. How do I know if the sub-contractors perform the job in a tradesman like manner?

If you are not sure about these questions then ask:

  • Can I front a judge and jury and act on my own behalf in court without a lawyer?
  • Can I take out a painful tooth without a dentist and save money?
  • Can I heal myself or my family without the help of a doctor?

Why didn’t I draw up the design drawings without a Building Designer? If the answers are you can’t because you don’t have the knowledge, the time, or the experience. Then why do you think you can build a new residence or a complicated addition or extension?

There can be numerous pitfalls to owner building. The potential savings you think you may gain are very often taken up with unknowns later in your project, even after your project has been completed. You also won’t have the protection of Homeowners warranty insurance, the seven (7) years structural guarantee and a minimum of 3 to 12 months maintenance services provided by a builder, by law.

As an owner-builder, you are on your own and this is one of the largest investments you will ever make in your lifetime. The most you can save, as an owner-builder is approximately 10 to 15% of the price a builder would charge you. Is 10% worth the headaches and your time and the additional time of construction associated with owner building?

Please don’t take any notice of the home renovation, “do your own building work, The Block, etc.” programs shown on TV. These programs are not realistic and it’s in no way they can complete these project within the short time that’s shown on TV. It is well known that the cameras are turned on when the pretty faces are on and they pretend to be working hard, the minute the cameras are turned off, a team of 12 tradesmen are doing the actual work. These tradesmen then walk away from the film set as soon the cameras are turned on and the pretty faces are back on your screen. So don’t be fooled it is all a con. The contestants provide labour to paint, demolish and decorate…. nothing else!

If your decision is to employ a licensed builder then please note the following:

Get no more than three (3) quotations for your building project. Make sure ALL builders quote on the same specifications, Basix certificate, Engineering details/certificate and design drawings as prepared by the architect/building designer for you and to be approved by the local council. Do NOT allow builders to change or substitute materials or change the type of construction other than to the prepared drawings or specifications without the permission of your architect/building designer.

This would be a breach of copyright and could be pursued by the design company through the courts. All builders must quote as per design drawings. Make sure all building quotes include an itemised statement of what is and what is not included in their construction costs. It’s like comparing apples with apples not apples with oranges! All builders must have the same opportunity of quoting for your project. Did you know that Insurance companies could refuse you a claim if they find out that the building was not built according to the council approved design drawings? So, for your own protection, please tell builders quoting for your project, to stick to your approved design drawings.

The reason why some builders want to change the design, construction type or materials and tell you they can build it cheaper for you are that they are unable or don’t want to build to your requirements because:

  • They would make bigger profits on an alternative method and materials.
  • Use inferior and cheaper materials to save money, not materials you specified or approved by the council.
  • Not competent to building in the manner specified, because of inadequate training or experience.
  • Not licensed to do the work as specified by the manufacturer or building materials supplier.

The third option that you have when building a NEW home is to forget your preferred design and go with a project builder. The project builders design and value for money is based on the project builder’s purchase in quantity of materials not QUALITY of building materials. Your choice is limited to what’s available to the project builder at the best-discounted price to the project builder, but you will be charged full premium price. If you want a building product of your choosing in most cases the project builder will charge you top dollar or tell you to provide this item yourself and thereby you won’t have the warranty that’s usually provided by the builder. More about project builders later.

Owner Builder

You will need to attend and complete owner-builder course at TAFE or online to receive your owner builder license.

Licensed tradesmen must carry out your subcontracting building work and they must have their own insurance cover.  Please verify the insurance and make a copy of the insurance policy (check the expiring date!) Get written quotes and signed contracts with the sub-contractors of your choice. Make sure you are on the building site while the project is being built. When a problem crops up you will be available to make a decision so that the trades you have employed are able to stay on schedule to carry out the building work. Also, be aware of your tax responsibilities. (GST and Withholding tax)

Licensed Builder

Employ only a Department of Fair Trading licensed builder. Check and witness his Home Owners warranty insurance, public liability insurance, and check the expiring dates! Make sure you read the builders contract carefully before signing. Ask any questions you may have PRIOR to signing. You and the builder should initial and date any changes in the contract prior to signing the complete contract as well.

The H.I.A. contracts are a good reliable contract with no surprises, but please read it for yourself. Provide the builder with a list of preferred PC Items with brand name, product number, and as much descriptive information that’s available. This will ensure that you are getting what you want in your project and not what the builder might supply cheaply! Make sure that the specification becomes part of the contract and both you and the builder must sign the contract, specifications and the attached P.C.Items list. Make sure you receive a copy of all these documents.

Choose your builder carefully and money should not be the main factor

Choose a builder because you like him and you can work with him. His communication skills must be excellent. Choose a builder with references and ask the builder to show you some similar work he has carried out.  Talk to people he has done work for previously. Choose a builder you are comfortable with, after all you will have to work with him till the project is finished. Depending on the complexity of your project, a 6-month period or longer is not unusual. Money cannot be the main factor here. Make sure you can understand your builder, communication is very important when building your project. If you are not happy with a certain item of material, talk to him straight away. Do not bring up the subject after the job is finished, you had a chance to inform him when the item was installed. Delays and redo cost money for him and ultimately – YOU. So speak up if you are not happy with anything related to your building project.

It is important that you have a “Happy” builder, so please pay his progress payments ON TIME when they are due. If you don’t pay him on time the builder can stop work and unpleasantness will creep into the job. You must avoid this at all cost. Make sure you and the builder stick to the signed contract and its schedules.

Project Builders

Project Home Builders design and build homes to gain maximum profit at the minimum cost and effort. Project homes are designed and built to suit the project builder’s minimum standards; any variation or change in design or building product will cost you an arm and a leg. The project price looks attractive but don’t forget that this price in many cases is the minimum base price. By the time you add on your particular site costs and “other” expenses, you will find that the base price for your project home is nearly as much as the full quotation you have received from a private builder.

A project home is a home design that’s shared by many other homeowners with some minimal variations in “dressing up the home” and paint colour variations, it is still a home that looks very similar or the same as the one down the street.

The construction method of a Project Home differs greatly from that of a Private Builder. The internal frame size is not the same size as the external frame size (External timber frame size 90 x 45 mm Internal timber frame size 70 x 45 mm) Most private builder construct a 90 x 45 mm timber frame external and internal.

Project builder includes in their concrete floor construction a “Waffle Slab” that is a cheap way to construct a floor which includes Polystyrene Foam Blocks in the floor construction instead of a solid “Raft Concrete Slab” a superior concrete floor slab. These are only examples of cheap construction methods that Project Builder use.

If you do want a project home make sure you get a full all up cost price with no cost variations in the quotation. Make sure you get the final cost price before you sign the contract.

Should a conflict arise contact a mediator immediately to prevent any extended period of delayed construction. Consider agreeing to a mediator as part of your building contract.