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Developers
Under the Home Building Act 1989, a developer is an individual or company or partnership on whose behalf residential building work was or is to be done:
in a building or residential development where there are or will be four (4) or more dwellings owned by that individual, company or partnership; or
in connection with a retirement village or accommodation designed for the disabled where all of the residential units are or will be owned by that individual, company or partnership.
A company that owns a building under a company title scheme is not a developer for the purposes of the Home Building Act 1989.
The builder is the individual, company or partnership that carries out the residential building work.
Residential building work
Residential building work is any work involved in the doing or the supervision or the co-ordination of the construction of (or alterations, repairs or additions to, or protective treatment of) a dwelling.
A dwelling (ie. house, terrace, villa, home unit, etc) includes:
swimming pool or spa
garage, shed, cupboards, driveway, fence, and
various other structures prescribed by the regulations when they are constructed for use in conjunction with a dwelling.
A developer usually arranges for another party (licensed contractor) to do the residential building work.
The contractor (whether an individual, company or partnership) which carries out the building work is:
responsible for the entire project
subject to the licensing and insurance requirements of the Home Building Act.
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Caution to developers
A note of caution to developers who contract two or more parties:
developers may contract one or more person/ company/ partnership to undertake part of a residential building project
each person/ company/ partnership is only responsible for the work specified under their contracts
if the developer contracts two or more parties to work on the same building project, the developer is supervising and co-ordinating the work; this means that they are taken to be undertaking residential building work under the title of ‘builder’ and take on responsibility for this role.
Example 1
Sometimes a developer may hire:
a licensed builder to supervise the technical aspects of the building project, and
other contractors to carry out various trade works in the building project.
The licensed builder is only responsible to supervise or do the part of work they are contracted to do and is not responsible for the work that the developer hired the other parties to do.
Example 2
A developer:
contracts a variety of trade contractors to work a number of roles, or
hires two contractors, where one contractor might do, say, excavation work as preparation for the foundations and another contractor does the construction work.
If the excavation work here is part of the entire residential building work project (eg. by being support work for permanent foundations, rather than a hole for temporary shoring) the developer who contracts the separate contractors to do the different parts could be seen as co-ordinating the whole project.
Important: Each situation should be considered on its own facts.
The developer who does the building work or co-ordinates other contractors who are doing the work becomes subject to the provisions of the Act as a ‘spec’ builder.
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‘Spec’ builders
A ‘spec’ builder is the general term for an individual, company or partnership who carries out residential building work on land that they own. The ‘spec’ builder is a licensed builder and therefore does not need to contract out the work, but can do their own residential building work.
The building work is speculative, meaning the property is generally intended to be sold at completion.
Regardless of their intention (to sell or keep the property for investment), the ‘spec’ builder must:
arrange home warranty insurance on the proposed residential building work before starting the work
attach the certificate of home warranty insurance to the contract for sale of the property.
If the home warranty insurance certificate is not attached to the contract for sale, the:
‘spec’ builder is committing an offence and may be subject to a penalty
purchaser has the right to rescind the contract for sale before settlement.
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Developers’ responsibilities
Home warranty insurance
A developer needs to ensure that the builder has arranged home warranty insurance for each dwelling before work commences if they contract a builder (principal contractor) to:
undertake the building work
take responsibility for the entire project.
When selling the property within 6 years of completion of the work, the developer must give the certificate of home warranty insurance with the contract, to each purchaser of a dwelling.
It is an offence for a developer to enter into a contract for sale of land where residential building was done or is currently being done or is to be done on the developer's behalf unless the certificate of home warranty insurance provided by the builder is attached to the contract for sale - except in certain circumstances for 'off the plan' sales.
The purchaser has the right to cancel the contract before settlement if the certificate of home warranty insurance is not attached to the contract of sale. Certain circumstances, such as sale off-the-plan are exempt.
Important: Under the Home Building Act 1989 a home warranty insurance policy is not required to cover a developer on whose behalf residential building work is being done. This is reflected in all currently available home warranty insurance policies, where developers are a standard exclusion.
Developers should seek independent professional advice as to other measures available to them to minimise any loss as a result of the death, disappearance or insolvency of the builder they engage. Such measures might include requiring a builder to have some other appropriate insurance in place (e.g. principal nominated contractor insurance) or requiring a builder to provide an on-demand bank guarantee, letter of credit or performance bond/surety which can be presented for payment if there is a default under the building contract.
Engaging licensed contractors
From 29 April 2005, it has been an offence under the Home Building Act, for a developer to:
knowingly employ an unlicensed contractor
refuse to disclose to a building inspector the names and addresses of persons working on the site
Monetary penalties may be imposed for breaches of the legislation. The Home Building Act provides for a maximum penalty of $22,000 for individuals and $110,000 for a corporation. |
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(原创)购买房产的友情提醒 (2007-7-23) wwwh 
发表于 2011-9-13 18:13
