Typically in Queensland most construction of residential dwellings is done by a licenced commercial builder who holds registration with the Queensland Building Services Authority and whose registration credentials can be checked publicly. However, the actual building work can also be legally done by a person who does not hold this registration, so long as that person is an “Owner Builder” under the Queensland Building Services Authority Act 1991 (QBSA Act). An Owner Builder is entitled to construct a new home or alter/renovate an existing home but is prohibited from construction of commercial or multi occupancy residential dwellings and if the project is worth under $11,000.00 there is no regulation at all.
As a condition to this however, the owner builder must:
- obtain an Owner Builder’s permit from QBSA;
- adhere to all of the Building Code and Council Regulation as if they were a licenced builder; and
- lodge a notice with the Queensland Titles Office declaring the performance of building works as an Owner Builder to facilitate registration of a notice on the Title to this effect.
Should the Owner Builder then seek to sell the property at some stage, the Owner Builder is then obligated under the QBSA Act to provide a Notice to any person who may seek to purchase the property within a period of 6 years from the date the works were undertaken as to the following:
- That works as specified were performed by the Seller as “Owner Builder”.
- That as a consequence no insurance is provided under the QBSA Scheme.
If the Seller fails to provide this notice then any purchaser of the property is deemed to have received a warranty from the Seller that the works have been completed to a reasonable tradesman standard and as a consequence is entitled to sue the Seller for any rectification works required should the works become defective within the 6 year period from original construction.
At the expiration of 7 years from the date of performance of the works, the Owner Builder is entitled to apply to the Queensland Titles Office to have the notice removed from the registration details on the property and after this time, the Seller is under no obligation to inform any perspective purchaser of the “Owner Builder” works in any subsequent sales.
The reason for all of this regulation is that if the works were done by a registered builder, any owner of the property or any subsequent purchaser of the property would be entitled to demand that the builder attend and rectify any defects on the property which materialise within 6 years from the date of construction of the work and if the builder does not comply then under the compulsory insurance scheme for which the builder has paid an insurance premium as part of the condition for approval of the plans in the first place, the QBSA will make an alternate builder available to perform the work at his expense. Beyond the warranty issues, it is also recommended that the standard REIQ Contract also be modified to insert special clauses concerning confirmation of Council approvals for all works and heighten scrutiny on the building and pest inspection.
Consequently, it is always recommended that any Seller or Buyer of an “Owner Builder home” inside the 6 year period should seek legal advice from an appropriately qualified Solicitor before signing any contracts.
Jenny Zande is a Solicitor of Zande Law Solicitors, with 20 years experience in practice. Jenny has extensive experience in conveyancing matters. We also acknowledge Matt Hannam from our office as co-author. Please feel free to review our firm and staff profiles.
The information in this article is merely a guide and is not a full explanation of the law. This firm cannot take responsibility for any action readers take based on this information. When making decisions that could affect your legal rights, please contact us for professional advice.