Owner Builders, understanding the concept

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Happy Owner Builder is knowleadgeble Owner Builder

Related pages for Owner Builders

"Building as an Owner Builder has its potential risks and potential rewards. On one hand, lack of knowledge and mistakes can be financially and emotionally costly. On the other hand the satisfaction of building your own home or extension, and with significant effort in gaining the maximum knowledge of building and its processes, taking great care and using the assistance of building inspectors can both potentially save you money and give you immense satisfaction.

Remember, as an Owner Builder, you are responsible for the integrity of the building works and performance for up to at least six years after it has been completed, especially if you sell it within that time frame."

David Kessler
Managing Director, The Building Centre Pty Ltd

Who is an Owner Builder in NSW?

An Owner Builder is anyone who does Owner Builder Work, including improvements, on their home or property for which they are listed as owner or part owner on the Title Deed, or a person having a prescribed interest in the land on which the work will be carried out if the market value of the work (including labour and materials) exceeds $12,000. The person must obtain a current Owner Builder Permit issued by the Office of Fair Trading.

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What is Owner Builder Work?

Owner Builder Work includes supervision or coordination of the construction, alterations, repairs or additions to a house, terrace house, town house, garage, swimming pool and certain other structures when:

  • Reasonable market cost of the project (including labour and materials) exceeds $12,000
  • Work relates to a single dwelling or dual occupancy:
    • that requires development consent under Section 4 Environmental Planning & Assessment Act 1979 (referred to as the Act)
    • that is a complying development within the meaning of the Act
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What are the ways to build as an Owner Builder?

Ways to build as Owner Builder

The longstanding and traditional Owner Builder way, was to do most of the labour and work yourself, only engaging tradespeople, where a licence was mandatory, such as electrical and plumbing works.

With the collapse, some years ago in New South Wales, of insurance for builders, the NSW Office of Fair Trading formerly introduced an Owner Builder Permit scheme to organise and legalise the process of building a new home, extension or renovation.

Having taken out an Owner Builder Permit in their name, below are some of the main ways that many people build:

  • Act as project managers and perform all the necessary tasks on site, including engaging the tradespeople and ordering materials as necessary
  • Engage, on a contract basis, a licensed "building site foreman" and work with that person to fulfil the needs outlined above
  • Enter into a contract with the Licensed Builder, who will organise everything and do all the work, leave the insurance responsibilities and post completion responsibilities and liabilities with the Owner Builder who holds the Owner Builder Permit for the site
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Who needs an Owner Builder Permit?

If you are going to do the building work as an Owner Builder and you don't hold a contractor licence issued under the Home Building Act 1989 authorising you to do such work, you must obtain an Owner Builder Permit.

You will not need a permit (or contractor licence) to do building work (not being specialist work) on your own home, if the work is valued at $12,000 or less, or it does not require development approval from your local council. We recommend you to check with your local council before commencing your work.

A licensed contractor may apply for an Owner Builder Permit for work on their own home, and gain the benefit of not needing home warranty insurance, unless and until they sell the home within six years period after completion of the work.

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What are the Responsibilities when building as an Owner Builder?

As an Owner Builder, amongst other things, you are responsible for:

  • Organising, selecting, checking building licences, preparing the contracts, overseeing and supervising all trades people involved in your project
  • Working out quantities, correct ordering, delivery and receiving of the building materials or items needed, as well as the management, safety and security of the building site
  • Obtaining all necessary council and authority approvals as well as paying their fees
  • Ensuring that the financial, taxation and insurance requirements of the building work are fully met, and fully comply with all laws
  • Providing a safe work environment at all times and complying with any WorkCover requirements
  • Ensuring that any contractor engaged to work on your site is appropriately licensed, to do the work contracted for when working on your project, and insured
  • Warranting that the work and materials comply with Australian Standards, will be fit for the purpose intended and that the work will result in a dwelling fit for occupation

Important note: Do your financial sums before you start and ask yourself if any savings you hope to make is worth the time and responsibility you must provide, as well as the risk and responsibility of the condition of the building if you sell it within six years after work completion.

From 29 April 2005, new offences have been introduced under the Home Building Act 1989. It is now an offence for the holder of an Owner Builder Permit to:

  • Knowingly engage an unlicensed contractor
  • Lend your permit to another person
  • Refuse to disclose names and addresses of contractors working on site

The maximum penalty for these offences is $22,000.

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How do I get an Owner Builder Permit?

To get an Owner Builder Permit you must apply to any NSW Office of Fair Trading which operate throughout New South Wales and produce the proof that:

  • You are over 18 years of age
  • You own the land or have a long-term lease, or you own shares alone or with other individuals in the company that owns the land upon which you intend to build or improve
  • You live or intend to live in the completed home or one dwelling of the dual occupancy as your principal place of residence

You should also provide:

  • A description of and the address of the proposed work, together with a copy of plans and the approved council development application number or complying certificate number
  • An Owner Builder Permit application fee
  • Copy of the Certificate of Completion of Owner Builder Course (which must be approved by the NSW Office of Fair Trading) or proof if you have equivalent qualifications and experience, if the proposed project is over $12,000

This requirement was set out to ensure that Owner Builders have information relating to the Home Building Act, statutory and recommended insurance, licences, contracts (ie. contents and management), building approval processes, occupational health and safety, hazardous materials and other building-related matters.

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Approved Owner Builder courses

The Building Centre recommends following courses to Owner Builders in NSW:

The above courses have identical content, the only difference is in the method of presentation of the course. Here's the list of the main topics that are covered in the course:

  • Mandatory Education and Information
  • Getting Started
  • Owner Building
  • The Approval Process (residential)
  • Certification (public and private sectors)
  • Administration (paperwork and planning)
  • Contracts - vital to get them right
  • Insurance - important to get it right
  • Termites
  • When Things Go Wrong
  • Glossary & "Construction Detail" illustrations

For more information call us on (02) 8303 0545 Monday to Friday 9am to 5pm (AEST)
You can download Courses Booking Form.

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What Owner Builders MUST KNOW

Counstruction sites could be dangerous, always wear protective gear

The applicant must be an owner of the land and meet the educational requirements of an Owner Builder. A spouse or relative will not be issued with an Owner Builder Permit for their partner's or family's land. Also, there are specific rules for applicants where a company owns the land. Contact your nearest NSW Office of Fair Trading on 13 32 20 to find out more.

We conduct NSW Office of Fair Trading approved Owner Builder courses. Information on equivalent qualifications are available from your nearest NSW Office of Fair Trading on 13 32 20 and ask for information sheet FTB23.

If you make a false statement or omit information in an application for an Owner Builder Permit, prosecution can occur under the following sections of the Crimes Act 1900:

  • Section 307A (false or misleading applications)
  • Section 307B (false or misleading information)

Some local councils ask for proof of an Owner Builder Permit or contract with a licensed builder before processing a development application. However some people may not have yet chosen who is to do the work before it has been approved. A Development Application (DA) number is the preferred evidence of what work is to be or has been approved by council, for which the permit is then issued.

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What are the limitations of an Owner Builder Permit?

An Owner Builder Permit is not a building licence. It does Not allow you to:

  • Do work other than the project covered by the Development Application or Complying Development certificate
  • Do specialist work such as electrical, plumbing, gas fitting, air conditioning and refrigeration work (unless you hold a licence for such work)

Only one Owner Builder Permit can be issued within any five-year period, unless the application and any earlier permit relate to the same land and to related Owner Builder Work, or unless special circumstances exist.

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Will you save money building as an Owner Builder?

Maybe yes, maybe no.

You may save on labour costs by undertaking some of the work yourself, but you might not be able to negotiate the bulk discounts on materials that a licensed builder or licensed tradesman can obtain. You also may not be able to find tradespeople when you want them at the price you want. Additionally, knowing the standard of workmanship, reliability and trust of a tradesman is very difficult, when you are using them for the first time. A Licenced Builder on the other hand, usually knows his tradesman and the quality of their work.

Many Owner Builders may need to pay rent where they are temporarily staying while they completing their project. Generally an Owner Builder will take longer than a Licensed Builder, to complete the project, and that represents additional costs.

Also due to inexperience, many Owner Builders make mistakes, which require the work to be redone, which can often include both materials and labour.

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Insurance issues and recommendations

There are other areas of insurance, apart from Owner Builder Home Warranty Insurance, that an Owner Builder should fully understand and get organised, well prior to commencing construction.

You and your contractors or sub-contractors should have:

  • Construction & Public Liability insurance
  • Workers compensation insurance
  • General site insurance to protect your property, work completed and materials stored on site

Check with your existing home insurer and financial institution (if borrowing money) to ensure you comply with their policies.

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Consultation services and building inspections for Owner Builders

Building Inspections can save you thousands on house maintenance down the track

We provide a range of inspection and building monitoring services such as:

Remember, The Building Centre has a range of fee-for-service services to guide and help you. There is no substitute for experienced an independent advice. Call us on (02) 8303 0545 Monday to Friday 9am to 5pm (AEST), to inquire about such services or to make a booking for an on-site Inspection or Advisory Service.

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Useful links for Owner Builders

These are state-specific information sources for Owner Builders

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