This information has been provided by
Australian law firm, Australian Conveyancing Services and is applicable in New South Wales
only.
Every owner-builder should be aware of the requirements of the Home
Building Act 1989, which imposes onerous duties and responsibilities
upon owner-builders.
An owner-builder is obligated to effect insurance for work done as an owner-builder (being a special type of policy), and must not enter into a contract for the sale of land on which owner-builder work is to be or has been done unless a copy of the contract of insurance is attached to the contract.
The requirement does not apply to a sale of the land more than 7 years after the completion of the work, or if the reasonable market cost of the labour and materials involved did not exceed $5,000.
If the Act is breached, the contract is voidable at the option of the purchaser before the completion.
The Home Building Act also implies the inclusion of statutory warranties in the contract in favour of the Buyer. The warranties are.
The work has been performed in a proper and workmanlike
manner and in accordance with plans and specifications;
All materials supplied will be good and suitable for the
purpose for which they are used, and that, unless so
stated, they are new;
The work has been done in accordance with the Home
Building Act and any other law;
The work has resulted in a dwelling that is reasonably fit
for occupation as a dwelling;
The work and materials used are reasonably fit for the
purpose.
If you are an owner-builder,
take
out
the
insurance
required
by
the
Home
Building
Act,
and
make
sure
that
you
attach
a
copy
of
the
insurance
to
the
Contract
of
Sale.
These warranties pass on to subsequent owners and are enforceable for a period of 7 years after the date of completion of the work.
If insurance has been effected, then you are covered by the terms of the policy with respect to any breach of the above statutory warranties. If no insurance has been effected, then you are personally responsible for any breach of the statutory warranties.
