Building certification for homeowners

What must my contract include?

Home building work over $5,000 including GST needs a written contract. Work from $5,000 to $20,000 can use a small job contract. Work over $20,000 needs a large job contract. It must include a progress payment schedule, the legal warranties and a checklist you should be able to tick yes to before signing.

Deposits are capped at 10% of the price. Large job contracts come with a cooling-off period of 5 clear business days. Within 5 business days, the builder has to hand you a copy of the signed contract. Progress payments should reflect work completed, not time elapsed. Variations (changes to the job) must be written, signed by both parties, and explain how the cost was calculated. For a contract over $5,000, you must receive the Consumer Building Guide from the builder before signing.

Do I need building insurance?

Unless an exemption applies, work costing more than $20,000 including GST must carry home building compensation cover. No deposit or other payment can be requested until the cover is in place and you hold the certificate. The HBC Check tool on Verify NSW lets you confirm a policy exists for your address.

This cover is a last resort. It pays when the builder cannot finish the work or fix defects because they are insolvent, have died or disappeared, or had their licence suspended for not paying a court or tribunal (NCAT) money order. It lasts 6 years from completion for major defects and 2 years for other loss. Extra time to claim may be available in some cases.

What warranties do I get?

The law builds warranties into every home building contract, even if not written in. The work must be done with due care and skill, follow the plans, use suitable new materials and comply with the law. It must be finished in the agreed time, or a reasonable time. The home must be reasonably fit to live in. Warranties last 6 years for major defects and 2 years for other defects, from completion. Arbitration clauses that try to limit your options are void.

Building it yourself, and checking a licence

Running the job yourself means getting an owner-builder permit where labour and materials exceed $10,000 and the work requires a DA or CDC (approval from council or a private certifier). For work of $20,000 or more, approved owner-builder training is also needed. Generally only one permit is issued in any 5 years, unless it relates to the same land or special circumstances apply.

Whoever builds, check their licence on Verify NSW before you sign. Make sure it is current, covers the work, and belongs to the party named on the contract. A licence held by a person does not cover their company or partnership.

A cost to budget for before approval

Once a job's value reaches $250,000 (GST included), the NSW long service levy applies, charged at 0.25% of that value. The person applying for the approval, or the person the work is being done for, pays it. A CC or CDC cannot be handed over until the levy is paid, so work cannot start before then.

Owner-builders holding a permit may qualify for a reduction of up to 50%, claimed when paying or within 12 months afterwards. If the work never begins and the approval lapses or is cancelled, a refund may be available.

Telling neighbours about a CDC

In metropolitan areas, a certifier or council must write to neighbours within a 20 m radius 14 days before certain CDCs can be approved. No formal notice is needed at this point in residential release areas, or in most of regional and rural NSW.

After the CDC is issued, the job of telling neighbours falls to you as the applicant. Written notice goes to neighbours within 20 m of your lot boundary ahead of any work. In metropolitan areas the minimum is 7 days. In regional, rural and residential release areas it is 2 days. The notice is for information only, and neighbours cannot lodge a submission against complying development.

Who answers for what on your build

Your builder must follow the stamped plans and is answerable for the work of subcontractors. You, as the applicant, must make sure every consent condition is met, including any that fall due before work starts or before occupation.

When the job is finished, the certifier decides whether the home is suitable to occupy. That decision does not cover the quality of fittings and finishes, which is a contract matter for you and the builder. For an independent view on finish quality, the NSW Government suggests considering a building consultant to walk through the home with you before handover.

Handover and the final payment

Do a walk-through with your builder before handover. Take the contract and inclusions list, photograph anything missing, damaged or incomplete, and agree in writing when each item will be fixed.

Pay the final amount only once the builder has dealt with those items and given written notice that the work is complete. Your contract may also set a defects liability period, often 13 weeks for a new home, so confirm how long yours runs.

Keep a folder with the contract and every variation, the plans and specifications, proof of each progress payment and your home building compensation policy details. Add the OC and trade certificates when they arrive. You may need any of these if a defect appears years later.

If a problem with the work comes up

Raise it with the builder promptly and confirm any agreement in writing, using a method that proves delivery, such as email. If that fails, Building Commission NSW runs a dispute resolution service for defective or incomplete residential building work, including damage to a neighbouring property. Where the matter is still unresolved after that referral, an application to the NSW Civil and Administrative Tribunal (NCAT) may follow.

Keep the certifier's role in mind. Contract disputes, delays and cost overruns sit outside it, because the certifier regulates compliance with the approval and the NCC, not the commercial deal. A concern about how a certifier has acted is a separate matter, handled through a complaint to Building Commission NSW.