Building Definitions & Contract Terms

BUILDER BACKGROUND CHECKS VICTORIA RECOMMENDS THAT A CONSTRUCTION LAWYER ALWAYS BE ENGAGED BEFORE A CONTRACT IS SIGNED

ANGLE OF REPOSE: The angle of repose, or critical angle of repose is the steepest angle of descent or dip relative to the horizontal plane to which a material can be piled without slumping.

ARCHITECT: A qualified person who is registered with the Architects Registration Board of Victoria to provide building design and contract administration services. 

BUILDER WARRANTY INSURANCE:  Now known as Domestic Building Insurance.

ANGLE OF REPOSE: The angle of repose, or critical angle of repose is the steepest angle of descent or dip relative to the horizontal plane to which a material can be piled without slumping.

ARCHITECT: A qualified person who is registered with the Architects Registration Board of Victoria to provide building design and contract administration services. 

BUILDER WARRANTY INSURANCE:  Now known as Domestic Building Insurance.

BUILDING CONSULTANT: An expert experienced in designing and/or constructing buildings. Before you engage a building consultant, ensure they have relevant experience and qualifications to complete the work you want them to do.

BUILDING CONTRACT: A legal document under the Domestic Building Contracts Act 1995 that forms an agreement between the builder and consumer about home building, renovating, extensions and repairs. It must be written in English, usually includes plans and specifications required for most domestic building work over $10,000 and should be signed by both parties.

BUILDING INSPECTOR: A person registered with the Victorian Building Authority as a building inspector. This person may operate as a private or council building inspector and is qualified to inspect buildings to ensure compliance with the Building Act 1993 and the current building regulations.

BUILDING PERMIT: Written approval from a registered building surveyor that shows your plans fit in with building regulations. This permit is required before works can start. Public building surveyors may be contacted at your local council, and private ones through telephone directories or professional associations.

BUILDING PRACTITIONERS: Includes building surveyors, building inspectors, draftspeople, engineers engaged in the building industry, commercial and domestic builders, demolishers, people who erect temporary structures, and quantity surveyors. Architects may be referred to as building practitioners if they are registered with the Architects Registration Board of Victoria and carry appropriate insurance.

BUILDING PRACTITIONERS BOARD: The Building Practitioners Board has been abolished and its functions and powers transferred to the Victorian Building Authority (VBA), including registering building practitioners, issuing certificates of consent to owner-builders, and supervising and monitoring practitioners' conduct and capacity to practise. For more information, visit the VBA website.

BUILDING REGULATIONS: Building regulations outline the standards for buildings in Victoria. The regulations are created under the Building Act 1993 and administered by the Victorian Building Authority (VBA). For more information, visit the VBA website.

BUILDING SURVEYOR: A person registered with the Victorian Building Authority as a building surveyor. Qualified to issue a building permit, inspect for compliance with the Building Act 1993 and building regulations and issue occupancy permits or certificates of final inspection, which mainly relate to health, safety and amenity requirements. Building surveyors do not supervise work or compliance with the contract.

CERTIFICATE OF FINAL INSPECTION: Issued by the building surveyor after final inspection of a renovation; it shows building work approved by the permit is completed. This is essential for the future sale of the home. There may still be associated works in the contract, such as paving and landscaping, that are incomplete. You are not required to make your final payment until all work under the plans and specifications is complete, despite receiving the certificate of final inspection.

COMPLETION: The point at which works to be carried out under the contract have been completed in accordance with the plans and specifications, and the building owner has received a occupancy permit or certificate of final inspection.

COMPLETION DATE: The date when building works are completed, according to the contract.

DATUM: A predetermined level on a site from which all other levels are established.

DEFECTS: Work that is in breach of the contract by failing to maintain a specified standard or quality, or is a breach of any implied warranty.

DEFECTS LIABILITY CLAUSE: A clause in a domestic building contract that gives the builder three, six or nine months to fix defects arising out of contracted works. The defect liability period should not be used to fix defects known at the time of completion – these should be fixed so that completion has been reached before the final payment is made.

DOMESTIC BUILDING CONTRACTS ACT 1995: Sets out minimum terms and conditions for domestic building contracts and implied statutory warranties for all contracts. It sets out specific requirements for major domestic building contracts (over $10,000) provides frameworks for paying deposits and stage payments, and for resolving domestic building disputes. This Act is administered by Consumer Affairs Victoria.

DOMESTIC BUILDING DISPUTES VICTORIA (DBDRV): An independent government agency that provides free services to help resolve residential domestic building disputes.

DOMESTIC BUILDING INSURANCE: Previously known as builders warranty insurance. Domestic building insurance (DBI) taken out by the builder for works over $16,000 (except for tradespeople who do not require registration where works cover only one trade). DBI only covers you if your builder has died, is insolvent or has disappeared. In these cases it covers structural defects for six years and non-structural defects for two years. The builder must be eligible for domestic building insurance to be registered. Your builder should provide you with a certificate of currency for an insurance policy that applies to work on your home.

DRAFTSPERSON / DESIGNER:  A person registered with the Victorian Building Authority to provide drafting and associated services.

EASEMENT: An easement is a section of land registered on a property title, which gives someone the right to use the land for a specific purpose even though they are not the land owner. An example is a shared driveway. There are also certain statutory easements which are not registered on your title, such as power or telephone lines, or drainage easements. If you wish to build over a statutory easement, you will need to get consent from your local council. For other easements, you will need to get consent from whoever the easement is vested in.

ENGINEER:  A person registered with the Victorian Building Authority as an engineer who is qualified to undertake the design, documentation, supervision, inspection and certification of buildings.

FITTINGS:  Items, for example garden ornaments, lighting or air conditioners which can be removed without damaging the property.

FIXTURES:  Items such as basins, toilets, baths, built-in wardrobes and kitchen stoves that are attached to the property and cannot be removed without causing damage.

FOUNDATION DATA:  A report on the results of soil tests done on your site before building commences. This information recommends the depths of the stumps or type of slab or strip footing needed. The contents of the report will affect your design and the cost of construction.

LIQUIDATED DAMAGES: Damages paid by the builder for expenses incurred by the owner if the home is not completed within the time stated in the contract. Examples include rent, travel and other out-of-pocket expenses.

OCCUPANCY PERMIT:  Issued by the building surveyor after final inspection of the home; it shows that the building is safe and suitable for occupation. This is essential for the future sale of the home. An occupancy permit does not necessarily mean that all building work is finished: there may still be associated works in the contract, such as paving and landscaping, to be completed. You are not required to make your final payment until all work is complete, despite being given an occupancy permit.

OWNER BUILDER:  Someone who carries out building on his/her property. Owner builders are not in the business of building. An owner builder must obtain a certificate of consent from the Victorian Building Authority in order to obtain a building permit to carry out domestic building work valued over $16,000.

PLANNING PERMIT: A permit obtained from the local council that relates to the zoning and use and development of land (for example, residential or commercial). This is not always required but if it is, it must be obtained before you can be given a building permit.

PLANS: Drawings of the design of a home or renovation completed by a designer/draftsperson, architect or builder. These should be signed by the builder and consumer and be part of the domestic building contract.

PRIME COST ITEM: A fitting that is part of the contract, but the specific type of item has either not been selected, or its price is not known at the time the contract is entered into. The builder needs to make a reasonable allowance for the supply and delivery of these items in the price included in the contract.

PROFESSIONAL INDEMNITY INSURANCE:  Insurance carried by a member of a profession or industry body such as a prescribed building practitioner or building lawyer. It is designed to protect the consumer from loss owing to acts or omissions by the professional acting on his or her behalf.

PROGRESS PAYMENTS: Also called stage payments, required on completion of each stage of building under the Domestic Building Contracts Act 1995. If, in unusual circumstances, an alternative payment process is agreed to, progress payments are required as stated in the contract.

PROVISIONAL SUM: A reasonable estimate of the cost of certain work if the builder, after making reasonable enquiries, cannot give a definite price when the contract is signed (for example, supply and installation of air conditioning).

REGISTERED BUILDER:  A builder registered with the Victorian Building Authority to complete limited or unlimited work. Membership of the Housing Industry Association or Master Builders Association of Victoria is not the same as registration.

SCOPE OF WORKS:  Plans and specifications showing what and how an owner wants to build. This should be included when getting quotes and be part of the contract. These should be sufficient for obtaining a building permit.

SOIL TESTS: Also called a geotechnical report, these are tests carried out on the site to find out the type of soil and the depth necessary for solid, stable footings. These will affect the design and cost of building your home (see also Foundation data).

SPECIALIST BUILDING LAWYER: A qualified lawyer who has experience in building matters.

SPECIFICATIONS: Detailed lists of specific building materials (usually described as an Australian Standard), appliances and fittings to be used in a building or renovation.

VARIATIONS: Changes agreed to by the owner and builder made to the building plans and specifications within the contract, after the contract has been signed.

VICTORIAN BUILDING AUTHORITY (VBA): The VBA registers and regulates building practitioners (including registration and licensing for works over $10,000) and plumbers. For more information, visit the VBA website.

VICTORIAN CIVIL& ADMINISTRATIVE TRIBUNAL (VCAT): VCAT is an independent appeal body that may require mediation and tribunal hearings to resolve disputes between consumers and building practitioners/tradespeople. For more information, visit the VCAT website.

VICTORIAN MANAGED INSURANCE AUTHORITY (VMIA): The VMIA offers domestic building insurance (DBI) for builders in Victoria, which provides cover to homeowners for incomplete or defective building work. Builders in Victoria must take out DBI, also known as builder’s warranty insurance, for work valued at more than $16,000. For more information, visit the VMIA website.

VOLUME BUILDERS: Companies that build large numbers of houses based on display home models.

ZONES:  Permissible uses of land and requirements for planning permits are set out in zones of the relevant planning scheme. Contact your local council for information about zones in your area.

 For a more complete listing of Victorian Building Definitions go to Consumer Affairs Victoria

Additional useful sources are the Victorian Building Authority and the Australian Building Codes Board

 

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