The proliferation and popularity of reality renovation shows like the Block and House Rules has created a population of home renovators and owner builders, excited by the prospect of buying a run down property, strapping on the tool belt and flipping the property for a profit. Whilst improving a property can be a financial masterstroke, it can also be financially devastating if the works are not completed to a professional standard.
Many owner builders are not aware that they will have the same liability as a builder if there are any building defects. The owner builder gives the same promises as a builder who entered into a building contract with someone to carry out work, and is liable to rectify defects for a period of 6 years following the completion of works. To avoid a claim for rectification of building defects, the following tips should be followed:
Hold onto the property
Upon completion of the works, an owner builder is liable to rectify any defects in the property for 6 years after the completion of any works. Holding onto the property for at least 6 years after the works are completed will nullify any claim that might be made by any future owners.
Home Warranty Insurance does not protect you
Owner builders must have insurance to cover their works and protect any future owner of the property. However such policies do not protect you, they only protect the future home owner.
Have someone else to sue
As an owner builder you will be liable for any mistakes that your contractors make. Entering into a written contract with any contractors and making sure that they have the means to satisfy any future judgment will protect you against any claims for work completed by the contractor.
To find out how we can assist you to resolve any building disputes, please contact our dispute resolution team.