{{ 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 Newsroom
Business support
Business support $vuetify.icons.faArrowRight
Become an apprentice host Hire an apprentice Why host an 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 Paperwork gone digital Contracts Online HIA Tradepass HR Docs SafeScan - managing workplace safety Planning and safety services Building and planning services How can HIA Safety help you? Independent site inspections 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 Qualifications 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 Products Digital Australian Standards Contracts Online Shipping and delivery Purchasing terms & conditions
About Contact Newsroom
$vuetify.icons.faTimes
$vuetify.icons.faMapMarker Set my location Use the field below to update your location
Address
Change location
{{propApi.title}}
{{propApi.text}} {{region}} Change location
{{propApi.title}}
{{propApi.successMessage}} {{region}} Change location

$vuetify.icons.faPhone1300 650 620

Your legal obligations to owner builders in WA

Owner-builders sometimes contract directly with licensed builders to either carry out residential building work or supervise this type of work. These types of arrangements often cause confusion, so it’s important that you’re aware of your legal obligations in these circumstances. The following information provides you with an overview of your obligations as a licensed builder when contracting with an owner-builder. If your client does not have an owner-builder permit, then this must be treated as a normal contract and not a contract with an owner-builder.

Who is an owner-builder? 

An owner-builder is a person who intends to have residential building work valued at $20,000 or more performed on their property and who holds a relevant permit to do that work. If the person does not hold the necessary owner-builder permit, then that person is not recognised as an owner-builder. 

Residential building work 

It’s advisable that you contract as the builder to perform the work in any instance. If you are contracting with an owner-builder you must use a contract that complies with the Home Building Contracts Act 1991. If you are using an HIA contract, HIA recommends that you insert some special conditions to reflect your circumstances, including: 

  • a clause narrowly defining the scope of works. This will help ensure that you are not taken to have a wider and more onerous role than that which you have agreed to 
  • a special condition excluding any obligation to supervise contractors not engaged by you and clearly stating that you do not warrant work performed by contractors not engaged by you. 

Supervision of owner-builder work

If you are approached to supervise owner-builder work then you should ensure you carry out regular and staged inspections, and require any faulty or defective work to be rectified by the contractor immediately. If defects are found, supervisors may be liable to future owners of the property for up to six years from the date the defects are discovered. 

If you are not actually doing the building work then do not let your licence be used by another person to do building work (i.e. do not lend your licence). As the licensed building work contractor whose licence has been used for the work, there is a liability on you to provide this statement. 

Dangers for owner-builders

There are perceived advantages for owner-builders such as lower costs by having the flexibility to pick and choose their own building materials and contractors on the basis of a lowest price. However, there are also significant risks involved with owner-building arrangements or with arrangements where the owner seeks to directly engage a number of sub trades in the building project. 

Some of the obligations that owner-builders may not be aware of include: 

  • an owner-builder who performs the work is responsible for the standard of the building work and structural soundness of the building for at least six years after the home is built and will be directly liable to any subsequent purchasers for defective work 
  • as the principal contractor, the owner-builder will be directly liable for Occupational Health and Safety and will be liable for any OHS breaches or accidents onsite 
  • an owner-builder must manage the contract(s) and trades persons on a daily basis during the construction stage 
  • owner-builders cannot sell or otherwise dispose of their property for at least three years from the date the building licence was issued, unless they have a written exemption from the Commissioner of Consumer Protection 
  • owner-builders can only be issued with a building licence once every six years unless they have a written exemption from the Commissioner of Consumer Protection. 

Home indemnity insurance 

Where the value of residential building work under the contract with an owner-builder exceeds $20,000 (inclusive of GST), you must take out home indemnity insurance and you must give the owner-builder a certificate of currency prior to accepting, receiving or demanding any payment. So the ordinary rules apply. 

This also applies if you are engaged to supervise residential building work for a fee that exceeds $20,000. 

To find out more, contact HIA's Workplace 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

Business support


 

Supporting building professionals with custom built services and products.

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

Explore Business support

Building it right topics


 

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