Issue Date:  -  Monday, 7 April 2003

Owner-Builders could be constructing a $10 000 fine

Anyone who has owner-built or is thinking of building their own home, should make sure they understand the law when it comes to selling that property or they could be out of pocket to the tune of $10 000, warns the Consumer Protection Commissioner Patrick Walker.

The Commissioner is concerned that owner-builders may not understand their obligations under the Builders Registration Act and the Home Building Contracts Act when building and subsequently selling their owner-built home.

"Under the Builders Registration Act owner-builders are required to keep their home for three years before they can legally sell it", the Commissioner said.

"If an owner-builder wants to sell within three years or build without using a registered builder within six years of obtaining their original owner-builder licence, they require formal authority from the Consumer Protection Commissioner for this to occur.

"I need to be satisfied that genuine hardship would occur if permission to sell or owner-build again was not granted", Mr. Walker said.

Recently a number of applications for permission to build or sell have raised concerns that owner-builders may have breached the Home Building Contracts Act when attempting to sell their homes.

Owner-builders must not enter into a contract to sell the home without first obtaining a home building indemnity insurance policy and supplying the purchaser with a certificate that complies with the Home Building Contracts Act. This applies for a period of seven years from the date of building the home.

An owner-builder who intends to sell and fails to take out indemnity insurance or fails to provide the certificate to a purchaser before entering into a contract to sell can be prosecuted with a maximum fine of $10 000 applicable.

"The purpose of these laws is to protect future purchasers against defective construction that might not be visible at the time of purchase", he said.

Free advice on Home Indemnity Insurance is available at www.docep.wa.gov.au & on telephone 1300 30 40 54