{{ propApi.closeIcon }}
Our industry
Our industry $vuetify.icons.faArrowRight
Economic research and forecasting Economics Housing outlook Tailored market research Economic reports and data Inspiring Australia's building professionals HOUSING The only place to get your industry news Media releases Member alerts Submissions See all
Business support
Business support $vuetify.icons.faArrowRight
Become an apprentice host Hire an apprentice Why host a HIA apprentice? Apprentice partner program Builder and manufacturer program Industry insurance Construction legal expenses insurance Construction works insurance Home warranty insurance Tradies and tool insurance Planning and safety services Building and planning services How can HIA Safety help you? Independent site inspections Solutions for your business Contracts Online HIA Tradepass HIA SafeScan HR Docs Trusted legal support Legal advice and guidance Professional services Industrial relations
Resources & advice
Resources & advice $vuetify.icons.faArrowRight
Building it right Building codes Australian standards Getting it right on site See all Building materials and products Concrete, bricks and walls Getting products approved Use the right products for the job See all Managing your business Dealing with contracts Handling disputes Managing your employees See all Managing your safety Falls from heights Safety rules Working with silica See all Building your business Growing your business Maintaining your business See all Other subjects COVID-19 Getting approval to build Sustainable homes
Careers & learning
Careers & learning $vuetify.icons.faArrowRight
A rewarding career Become an apprentice Apprenticeships on offer Hear what our apprentices say Advice for parents and guardians Study with us Find a course Get your builder's licence Learn with HIA
HIA community
HIA community $vuetify.icons.faArrowRight
Join HIA Sign me up How do I become a member? What's in it for me? Get involved Become an award judge Join a committee Partner with us Get to know us Our members Our people Our partners Mates rates What we do Mental health program Charitable Foundation GreenSmart
Awards & events
Awards & events $vuetify.icons.faArrowRight
Awards Australian Housing Awards Awards program National Conference Industry networking Events
HIA products
HIA products $vuetify.icons.faArrowRight
Shop @ HIA Digital Australian Standards Contracts Online Shipping and delivery Purchasing terms & conditions Products Building codes and standards Hard copy contracts Guides and manuals Safety and signage See all
About Contact Newsroom
$vuetify.icons.faMapMarker Set my location Use the field below to update your location
Change location
{{propApi.text}} {{region}} Change location
{{propApi.successMessage}} {{region}} Change location

$vuetify.icons.faPhone1300 650 620

Legal obligations when working for an owner-builder

Under the Domestic Building Contracts Act 1995 and the Building Act 1993, persons working for owner-builders in Victoria have certain legal obligations they must adhere to or risk facing possible prosecution.

‘The three golden rules’ – RWC

Many builders and subcontractors believe that because an owner has taken out a building permit they don’t have to be registered or provide warranty insurance because the owner will obtain the required insurance. This is wrong. 

It is irrelevant who takes out the building permit. The only critical question you must ask yourself is whether the work or service you are supplying is over $5000. 

If the answer is ‘yes’, this triggers ‘the three golden rules’ expressed simply as ’RWC’. 

R – Registered – you must be registered with the Building Practitioners Board as a Domestic Builder (Unlimited, Manager or Limited) if the work is in excess of $5000, and

W – Warranty – you must provide domestic warranty insurance if the work is in excess of $16,000 to protect the owner against defective work, non-completion, non-complying work, etc., and

C – Contract – you must use a contract that complies, such as the HIA Plain English Contract, if the work is in excess of $5000. 

The following examples may assist you to understand your obligations clearly: 

John Citizen decides to build his own home and subcontract out different aspects just like a registered builder. John also obtains the building permit in his name, as an owner-builder, after obtaining consent to do so from the Victorian Building Authority (VBA). 

Concrete slab

John receives a quote for the installation of the concrete slab and it will cost more than $5000. As the cost is over $5000, the RWC rule applies and the concreter must be registered as either Unlimited, Manager or Limited floor slabs and footings and use a complying contract but as the cost of work is less than $16,000 the concreter does not have to provide warranty insurance. 

Frame and fix 

John obtains a quote from a carpenter to construct and erect the wall frames as well as the roof, including installing all the windows and external door frames ready for the brickwork. As the quote is valued at $18,000, then RWC applies and the carpenter must be registered as Unlimited, Manager or Limited carpenter, use a complying contract and provide warranty insurance. This would equally apply to a prefab wall and truss company who supplies and installs the framing. 


The bricklayer’s quotation to lay the bricks is in excess of $5000, but under $16,000, so RWC applies and the brickie must be registered as Unlimited, Manager or Limited to Brickwork, use a complying contract. As the contract price is less than $16,000 the bricklayer does not have to provide warranty insurance. 

The same rule of RWC applies to the roof tiler, the cabinet/kitchen contractor (if they supply and install the cabinets) and the carpenter who does the fix if their individual contracts exceed $5000. 

It is worthwhile to note at this point that a Domestic Builder Manager (DB-M) can only arrange or manage the carrying out of domestic building work. They cannot actually carry out the work themselves and must engage a registered builder to supervise or carry out the work for them. 

A Domestic Limited builder is limited to the specified Code so, for example, the bricklayer can only do brickwork. 

If the service provided is supply only, then RWC does not apply regardless of the cost. This would typically apply to a prefab wall /roof truss company or a kitchen/cabinet maker where they supply the goods only. 

Exemptions to the legislation

There are exemptions to the legislation, and the following types of building work are exempt if the contract involves only ONE of the following: 

  • Attached external fixtures (awnings, security screens, insect screens, balustrades)
  • Drainage (plumber covered under separate legislation)
  • Electrical (electrician covered under separate legislation)
  • Glazing 
  • Installing floor coverings (carpet, vinyl, etc.)
  • Painting
  • Plastering
  • Plumbing (sanitary, water, gas, roofing, air conditioning, etc.)
  • Tiling (floor and wall)
  • Erecting a chain fence to enclose a tennis court
  • Erecting a mast, pole, antenna, aerial or similar structure. 

If you intend to do more than one of the above ‘exempt’ types of building work such as plastering and painting and the cost is over $5000 then RWC applies with warranty applicable if the cost exceeds $16,000. 

An owner may well end up with multiple warranty covers. However, they will still need to obtain an owner-builder report and warranty insurance (to cover the whole of the works) if they sell the home within six and a half years from the date of the Occupancy Permit or Certificate of Final Inspection. 

There are other exemptions where the legislation, or parts of the legislation, do not apply, such as works to the official residence of the governor, remand centres, youth training centres, works for public housing, etc. and specific advice should be sought if in doubt. However, it would be unlikely that the ‘owners’ would act as owner-builders in these instances. 

Acting as a ‘supervisor’

Another area where builders regularly get involved with owner-builders is when the owner asks the builder to ‘supervise’ the work for them. You have to act in a role similar to that of an architect to avoid RWC applying. 

If you are going to arrange or manage the carrying out of the work, then by definition you are the builder and RWC applies if your fee is in excess of $5000, and warranty will be required if the cost exceeds $16,000.

It is a fine line you are treading and ideally your role should be limited to contract administration where you advise the owner on quotes, variations, progress claims and payments, quality of work done and compliance with the contract documents. The key is that you are advising the owner on all these matters and the owner then takes the appropriate action, not you! 

You should also ensure if you are acting as a supervisor that the required trades are adhering to the rules of RWC (where not ‘exempt’) by overseeing that they use contracts that comply, ensuring the required warranty insurance is supplied and, of course, that they are registered in the appropriate category or code. If they don’t meet the RWC rules then you should be advising the owner not to engage them. 

In these instances you are acting in a consulting role and are not seen as acting as a builder by organising or arranging the trades, directly instructing them and/or paying them. Your fee in this type of arrangement (as a consultant) is not regulated and your role should be clearly specified in your contract with the owner. 

To find out more, contact HIA’s Building Services team.

Email us

Share with your network:

More articles on:

{{ tag.label }} {{ tag.label }} $vuetify.icons.faTimes
Find guides, how-tos, resources and more

Building it right topics


Can’t find what you need, check out other resources that might be closer to the mark.

Business support


Supporting building professionals with custom built services and products.

  • Legal support
  • Contracts Online
  • Host an apprentice
  • Insurance services
  • Managing safety

Explore Business support