Common Mistakes When Choosing a Builder (Victoria Only)
The 7 Deadly Sins
First things first, too many people rush the process of choosing a builder. We believe that choosing the right builder is the most important step in a building project.
Slow down. It's not a race.
1: Choosing a Builder Who Isn't Properly Registered or Insured for Your Project
Your builder must be registered with the Victorian Building Authority (VBA). There are multiple ‘unlimited’ and 'limited' registrations (eg: bricklaying, carpentry, structural landscaping, pool building, etc) - make sure your builder's registration is appropriate for your specific project.
Additionally, for all projects over $16,000, the builder must provide Domestic Building Insurance (DBI). It’s essential you have a copy of that policy before the project starts.
Also, don't confuse DBI with other kinds of insurance. Even if your builder says 'they're covered’ or that they ‘have insurance’, they may not necessarily have DBI. Builders should take out a range of additional insurances such as public liability, contract works insurance, etc.
Also, by law, you must have a written ‘major domestic building contract’ for work over $10,000 – only Victorian registered builders can complete these contracts.
These three requirements are mandated by the Victorian government to protect consumers. If you use an unregistered builder, without DBI and have a non-compliant contract, the law is being broken. Building permits cannot be issued and a complex mess will need to be addressed.
2: Only Getting One Quote
Your new home, extension, renovation or landscaping may be one of the largest financial undertakings of your entire life – don't rush the quotes.
Get as many quotes as possible. Six or eight is better than one or two. Understand the range of prices and project scope so you can make an informed choice. Granted, it can sometimes be difficult to obtain quotes from builders, particularly as Victoria is experiencing a construction boom - persevere.
Consumers are often shocked by a large variation in prices provided by builders. Be aware that some builders may not be keen for the work and simply inflate their price.
The only way to benchmark the cost of the project is to obtain several quotes from the exact same detailed drawings. Investing time now to assess prospective builders will pay off in the long run.
3: Signing a Contract You Don't Understand
Many people sign a contract without fully understanding what it means.
There’s limited value in calling a construction lawyer after you’ve signed and the ‘cooling off period’ has elapsed. Terminating a contract after works have begun is generally not easy. Very few builders are prepared to finish incomplete works. It's better to get the contract right in the first place.
Once you've chosen a builder, and have a contract, it's essential you have an independent construction lawyer review it before you sign.
You'll find this Consumer Affairs Victoria Contract Checklist useful too.
4: Choosing the Cheapest Quote
If an offer seems too good to be true, it probably is.
If you choose an irresistibly low quote, don’t be surprised if you get delays, large variations and poor workmanship.
5: Signing a Contract 'On the Spot'
Don't let builders or their sales staff rush you. Pressuring consumers to sign a contract (or pay a deposit) to secure a ‘special discount price’ is unprofessional – and often leads to a bad result for the building project. Don't be rushed.
6: Giving in to Pressure Tactics
Some builders use unscrupulous sales tactics that may not technically break the law, but can cause significant financial pain to consumers. Unethical tactics are a sign of a business that's not competing in the marketplace on its merits.
If you're feeling pressured to hand over a deposit or sign a contract on the spot (which is now illegal in Victoria) because ‘material prices go up tomorrow’ or if you’re offered a 'free solar panel', or a 'free pool cleaner' – or anything ‘for a limited time’ – you should be very sceptical.
Ethical builders will promote the merits of their expertise, not denigrate their opponents.
Trust your gut.
7: You're Talked into Becoming an Owner Builder
Be extremely wary of builders who ask you to become an ‘owner builder’ or have you attempt to arrange the building permit. In Victoria, only registered parties can obtain a permit – so this request may be a sign that the builder doesn’t have registration, or that it's lapsed. They may have had their registration disqualified.
Too many homeowners experience grief because they neglect to do their homework. They rush the quotation phase, don't read or fully understand the contact and sign in haste.
Importantly, you have a responsibility to research exactly who it is that you're engaging to build the house, renovation, landscaping, pool or kitchen of your dreams.
Time to get to it!
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