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COMMON MISTAKES

Australian Owner Builders Factsheet 14 AOBFS14

Make no mistake, renovating is one of the biggest challenges you are ever likely to face in your life, but the rewards both financially and personally are fantastic. Make no mistake, renovating is one of the biggest challenges you are ever likely to face in your life. That being said, the rewards of a successful renovating project should never be underestimated. To eliminate the risk of costly mistakes, taking a little advice is always recommended. Here are some tips to help avoid problems.


Unlicensed Contractors
When hiring contractors always check o ensure they are qualified and registered. The contractor may be required to provide you with a written contract and Warranty Insurance. If using a registered builder always check their credentials with the regulating body in your state.

Cheap Products and Materials
Using low quality or cheaply made products can be a hazard to the project and anyone living in the home. Cheap products and materials have a high failure rate and could end up costing you more in the long run with expensive repairs or re-fitting. This does not mean you should not go shopping for bargains, just ensure the products you purchase are good enough to do the job.

Overdoing It
While we are all tempted to take on more than we can handle overextending your abilities or physical capabilities will result in health risks and cost blowouts. Most owner builders are already doing a 35 – 40 hour week at work and the risk to your main income stream should not be under estimated. The end result may be hiring a contractor to finish what you started for dollars which were not budgeted for.

Poor Design
The finished product will only be as good as the initial design. Take your time when planning and get it right. Poor design or altering the plan after the project is under way will cost more as will delays in production.

New Ideas
Take into account the input of others who have done a similar program before or industry professionals. The combination your imagination and the practical experience of a designer, architect or builder can result in a smooth project and utilise the latest in materials and methods.

Enough Time
Not allowing enough time to finish the project can cause you and your contractors` stress and risk shoddy workmanship. Allow sufficient time when planning the project and understand the processes and time constraints for each phase of the program.

Budget Management
All projects are subject to unforseen circumstances and costing in a safety margin is good management. The allowance of an extra 10 – 15% should cover the project against cost blowouts due to problems.

Flow-ons
The risk when renovating is to complete the project and find it highlights the deficiencies of surrounding areas. Always work within your budget and resist the temptation to just do “those other things” and over extend the budget. The other areas can be done, but make sure it is planned and fully costed before you make your decision.

Overcapitalising
If the project is being done with resale in mind be very clear as to what the property will be valued at. You may find the project costs will not be recouped in the short term. If you plan to live in the home for some time the costs may be justified in lifestyle and comfortable living.

Your Rights
If using a builder, check that he is correctly registered and insured. The contract should include a comprehensive description of the project, payment schedule, timetable and the products being fitted, including the make and model of each appliance. The responsibilities of contractors and sub-contractors needs to be spelled out and the contract should list warranty provisions and the mechanism for changing procedures and resolving disputes. Signing a simple quotation does not give you the level of consumer protection as a signed contract under the legislation.

Control the Project
The project is yours so the responsibility of proper control rests with you. You need to be on site as much as possible, watching, checking and monitoring the standard of workmanship and materials. While good relations with your workers and contractors are a bonus, care needs to be taken to ensure the relationship stays professional. Becoming too friendly with tradespeople could become a problem. The contractors aim is to do the job as quickly as possible, get paid and move on the next client while your aim is to get the job one properly and effectively. You need to stay in control of the project, not the contractor.

Homework
Spend time researching the project and what is required. Forewarned is forearmed. One of the best research tools available is “Introduction to Owner Building” by Ron Wyers. Recommended by the Institute of Owner Building, copies of the reference work are available through Australian Owner Builders and The Australian Owner Builders Club. Investing $25 is money well spent when compared to the cost of the renovation and the potential losses if you get it wrong.

Informing your Insurer
When renovating or extending, notifying your insurer is imperative. Your insurer will need to know, in writing, what works are planned and if you are vacating the premises during the works. Check your policy to ensure you are adequately covered for the planned works. You may need to obtain extra or separate Construction & Public Liability Insurance.

Selling the Property
Many owners of renovated properties do not understand their legal obligations when it comes to selling the property. If the value of the works exceed $5,000 and you sell the property within 6 years, you may have to provide Owner Builders Warranty Insurance for the new owners. To purchase the Warranty insurance you will need to obtain an Inspection Report from a Building Surveyor and fix any problems. This applies even if no building permit was issued and can apply to works done personally for maintenance, renovating or upgrading the existing dwelling or outbuildings.

Due diligence when planning the project will go a long way to ensuring your project is a success and reduce the stresses to yourself , your family and all workers on the site. Never be afraid to seek advice from others keep good records. We wish you well with your project.

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