Kitchen, bathroom and laundry contracts in NSW

Home warranty insurance

If the work you will be doing is valued at more than $20,000, you need to take out insurance under the Home Building Compensation (HBC) Scheme (often referred to a Home Warranty Insurance or HBCF) unless an insurance exemption applies, which might apply for some Kitchen, bathroom and laundry works.  You must not carry out such residential building work or demand or receive any part of the contract price until insurance is in force and the client has been provided with a certificate of insurance.

If you are contracted to do residential building work that consists only of built-in furniture work, and any incidental electrical wiring work involved in the installation of lighting as part of built-in furniture, the contract is exempt from the requirements to take out insurance under the HBC if the work is done under a separate contract and not as part of a contract for other residential building work.

For the purposes of this exemption, built-in furniture work means the making and installation of furniture that is made to measure and fixed to a dwelling (such as built-in cupboards, bench tops, wardrobes, entertainment units and the like), and which may be made off-site and installed as a complete unit.

The Kitchen, bathroom and laundry contract includes a note at Item 9 of Schedule 1 regarding this exemption. If your works are exempted, you should highlight this note to the owner, and item 13 of the Consumer Checklist.

Public Liability

Your contract requires that you take out public liability with a cover of at least $10 million.

If the owner tells you to insure the products you will be installing against loss or damage occurring after they are delivered to site or to similarly insure the owner’s property whilst you are carrying out the installation, you can charge this extra cost back to the owner plus another 20% for arranging the insurance.

For more information, contact HIA Insurance Services on 1800 633 467.

The Kitchen, bathroom and laundry contract allows you to nominate progress stages that will act as a trigger for payment. The amount claimed under each stage should reflect the actual value of work completed within that stage. For fixed priced contracts, you will be able to claim a progress payment following the completion of the stage of work. It is important that the work described in a progress stage is complete before submitting a claim. Each stage must be described in clear and plain language.

Should you choose to use a HIA Works on a Cost Plus Basis contract for your building works, you will be able to make a progress payment claim for labour and materials already performed or costs already incurred at intervals fixed by the contract or on an ‘as invoiced’ basis and can include a margin. These claims for progress payments must be supported by invoices, receipts or other supporting documentation.