Increase to Deposits for Cabinetry Work - WA
May 27, 2020
In a win for HIA members, the WA Government has increased the maximum allowable deposit a builder or cabinetmaker can charge a homeowner when carrying out cabinetry work.
From 27 May 2020, the Home Building Contracts Regulations 1992 will be amended to allow builders and cabinetmakers to claim a 20% deposit from homeowners where:
- a home building contract is entered into for cabinetry work; and
- the value of the off-site work performed under the contract is more than 50% of the total amount payable under contract.
The changes mean that a kitchen and bathroom contractor who, for example, is contracted by a home owner to supply and install a custom made kitchen for $50,000 where $30,000 is attributable to the fabrication of the cabinetry off site can charge a $10,000 deposit. This is because the value of the offsite work and materials is more than 50% of the contract value.
What is Cabinetry Work?
Cabinetry work includes:
- The manufacture and installation of kitchen, bathroom, laundry and other custom-made cabinets and fitments; and
- The refurbishment or repair of kitchen, bathroom, laundry and other fitted cabinets and fitments.
However, cabinetry work will not include, the purchase and installation of off-the shelf cabinets.
What is Off-Site Work?
Off-site work, in the context of home building work, means work performed at a place that is not the place at which the home building work is to be finally installed or constructed under the contract.
Deposits otherwise remain unchanged
For all other home building work, the maximum allowable deposit otherwise remains at 6.5% for works between the value of $7,500 and $500,000.
Notice to Homeowner to be updated
As a result of the changes the ‘Notice to Homeowner’ has been updated and is available for immediate use. This notice must be provided to a homeowner when carrying out home building work between $7,500 and $500,000. The updated notice is also available in hardcopy format from HIA.
Builders can use the previous notice for a period of six months when undertaking home building work which allows a maximum deposit of 6.5% to be claimed, after which the amended notice should be used. Where cabinetry work is being performed and there is an intention to claim the maximum deposit of up to 20% the updated ‘Notice to Homeowner’ should be used.
HIA is currently taking steps to update all HIA contracts. HIA is in communication with the Department of Mines, Industry Regulation and Safety to ensure that a practical and educational approach to compliance is taken regarding the use of the updated notice.
For more information please contact a Workplace Adviser on 1300 650 620