Building Trust
Sydney Morning Herald
Wednesday May 21, 1997
Changes to home building laws will encourage builders to lift their games and offer more protection for renovators. JENNIFER STYNES reports.
I have just survived seven illuminating months with builders, painters, electricians and plumbers in the house constantly, and can add one truly awful tale to my "horrible builder stories" portfolio.
Thank heavens, it came to my notice just as my own project was ending without mishap (apart from one electrician who didn't realise he was flirting with death every time he walked through the front door).
This is the story: this family had worked hard all their lives until they could afford the perfect home in a very salubrious harbourside suburb. Having bought the house of their dreams, they called in a builder who had come flush with glowing recommendations - and who has turned their lives into a nightmare. The
million-dollar-plus house now needs up to $200,000 spent on it, just to fix up his mistakes.
Some nightmare, eh? Still, anyone playing the national sport, renovating, probably has a bucketload of these stories tucked away for appropriate dinner-party conversations. And where would TV current-affairs programs be without a constant supply of shonky builders?
According to the Minister for Fair Trading, Faye Lo Po', NSW consumers spent more than $7 billion on new dwellings and renovations last year. "With so much at stake, it is imperative the industry is competitive, fair and professional," she said at the recent launch of the new Home Building Act.
Changes to home-building laws will "create incentives for better standards of work and make it
harder for sub-standard builders to
operate in NSW," she said, with what seems like an unreasonable degree of confidence.
"From now on, good builders will not have to subsidise bad ones. Previously, all builders, regardless of ability or complaint record, paid the same premium. Now, good builders and tradespeople may be rewarded by lower insurance premiums."
Until now, builders have been
covered by the Department of Fair Trading at the expense of taxpayers, who will no longer have to pay for or underwrite the insurance scheme.
But from now on, she said, consumer insurance protection against shoddy or incomplete building work is doubled to $200,000 and a certificate of insurance for any work over $5,000 is required before a contractor begins work. For those contractors operating without insurance, the penalties are heavy-duty - up to $10,000.
So, renovators and builders, be aware! If the builder or tradesperson to whom you have entrusted your life savings and your sanity is not insured, you won't be covered. Demand a written contract if the job is over $200 and require the builder to show proof of insurance before you sign the
contract. Only the contractor who deals directly with the client is required to take out insurance, not any of his sub-contractors.
And those of you strong enough, or silly enough, to be an owner-builder will have to get insurance coverage if you intend selling within seven years of completion of the work.
The insurance cover is essentially for defective or incomplete work and loss of deposit. The type of matters covered under the scheme that existed until now will continue to be covered, but the details are covered in the
regulations. The cover of up to $200,000 for defective or incomplete work doubles the cover available until now, although additional cover can be purchased as an option.
Of course, there's always that awful feeling for the client who's just been ripped off mercilessly that the next builder on the scene to fix up the mess will be no better than his predecessor. According to the Department of Fair Trading: "The standard of work to be provided by the builder is set by the building contract. As with any insurance system, the insurer will assess the loss and provide what it believes to be the apporpriate compensation.
"Under the new scheme, a consumer dissatisfied with the decision of the insurer has the right to take the matter to the Building Disputes Tribunal (if the claim is up to $25,000) or Commercial Tribunal (for higher amounts) for final
adjudication."
Which seems to rule out the fibro extension being turned into the Taj Mahal at the expense of the insurance company.
From the builder's point of view
Not enough people have organised contracts in the past, according to licensed carpenter Rod Greening, of Tamarama, pictured. "But they should have. Probably 30 per cent of work is done on a handshake. But there are a lot of bodgy builders around - Sydney is full of them, and a lot of people are hoping it will go away," said the New Zealander whose work is definitely not bodgy, as this writer can attest.
"However, this new scheme means that builders will have to adjust their prices to cover the insurance costs." He warns against "handymen" who advertise in the paper for work under $200. "It always creeps up well above that, even though they don't have a licence. We need to have a law and really enforce it since this sort of work can be life-threatening, because they often don't know what they're doing."
He is encouraged that "standards are getting tighter. People who got licences 15 or 20 years ago might not find it so easy to get one these days."
© 1997 Sydney Morning Herald
