Contract Obligations as an Owner Builder

Brief Summary of the Building Services Authority (‘BSA’) and Contract Obligations as Owner Builders

The Queensland Building Services Authority Act 1991 (‘QBSA Act’) provides that a person is required to obtain an Owner Builder permit if they wish to perform building work on their own property (either to construct a new home or alter/renovate an existing home) to a value of $11,000.00 or more. Building work completed to a value under $11,000.00 is not regulated by the BSA and accordingly, an owner-builder permit is not required to be obtained. An exception to the building work permitted to be performed as an Owner Builder applies to any construction of commercial or multi-occupancy residential dwellings.

The BSA keeps a public register which can be accessed online to find details of all commercial builders holding a building licence and all Owner Builders who have been registered to hold a permit. Once an Owner Builder Permit is issued a notification is subsequently entered onto the land title for a minimum period of 7 years, which ensures any future purchasers of the property are made aware of the work performed under the permit and that the work is not covered by BSA insurance. However on expiry of this 7 year period, the Owner Builder is entitled to apply for the notice to be removed from the land title and once such notice is removed, the Owner Builder no longer has an obligation to provide certain Notices to potential purchasers of the property (for further information on Notices refer below to ‘Selling your property as an Owner Builder’).

By performing building work to your property as an Owner Builder you forfeit your eligibility to be covered by BSA insurance on the work completed
and also lose your right to benefit from the BSA’s dispute resolution service.

An Owner Builder must:

• obtain an Owner Builder’s permit from the BSA;
• adhere to all of the Building Code and Council Regulation as if they were a licensed builder; and
• lodge a notice with the Queensland Titles Office declaring the performance of building works as an Owner Builder to facilitate registration of a notice on the Title to this effect.

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Selling your property as an Owner Builder

When an Owner Builder sells property with either construction or renovation work completed by them as an Owner Builder, the seller is obligated
under the QBSA Act to provide a Notice to any person purchasing the property within a period of 6 years from the date the works were completed. The seller’s Notice provided to the purchaser must state that work has been completed by the seller as Owner Builder and specify details of the building works performed (together with the Owner Builder’s name and contact details), and warn the purchaser that the building work to which the notice relates it not covered by insurance under the QBSA Act.

In the absence of a seller providing the purchaser with this relevant Notice prior to them signing a contract to purchase the property, the seller is
deemed to have given the purchaser a contractual warranty that the Owner Builder works have been completed to a reasonable tradesman-like standard. Accordingly, the purchaser has the right to sue and claim compensation from the seller for any rectification works required to the original work performed by the Owner Builder should those works become defective within the 6-year period of completion of works.

Importance of knowing your obligations as an Owner Builder

It is recommended that sellers and purchasers of any property which has or is suspected to have had Owner Builder work completed within the 6 year period (whether it be the Owner Builder selling the property with works completed, or the sale of a previous purchase that has had works completed by another Owner Builder) seek legal advice prior to signing a Contract of Sale.

If you wish to discuss your obligations as an Owner Builder or discuss what additional property inquiries we recommend you should make when purchasing from an Owner Builder, then please contact our conveyancing manager Libby Dessaix or our Solicitor Mark Game on (07) 3236 0001.

The information contained in this article is correct as of 5 February 2014. The information is a guide only and is not to be taken as legal advice and at all times we recommend you seek independent legal advice regarding your own individual circumstances from your legal representative.

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