8 Things to Know Before Building | Bundaberg & Wide Bay

There Is a Queensland Home Warranty Scheme

One of the first things many homeowners are surprised to learn is that Queensland has a home warranty insurance scheme.

For most eligible residential construction work valued at more than $3,300, including labour, materials and GST, cover under the Queensland Home Warranty Scheme is required.

The cost of the premium forms part of the building contract. The builder collects the premium from the homeowner and pays it to the QBCC on the homeowner’s behalf.

The scheme is designed to provide a level of protection in certain situations if something goes seriously wrong.

Depending on the circumstances and the applicable cover, that may include situations where a licensed contractor cannot complete eligible work, does not rectify defective work, or where subsidence or settlement affects the building.

There are conditions, exclusions and limits, so it is important not to assume the scheme covers every possible problem.

But as a homeowner, it is worth knowing that the scheme exists and understanding why that insurance premium appears in your building documents.

Your Building Contract Needs to Be in Writing

A handshake may be enough for some things in life.

Building a home is not one of them.

In Queensland, domestic building work priced over $3,300 generally requires a written contract.

The contract should clearly establish what has been agreed between the homeowner and builder.

That includes important details around the work being completed, price, payments and other conditions applying to the project.

This is not simply paperwork for the sake of paperwork.

Imagine having a conversation during the planning stage about an item you believed was included, only for everyone to remember that conversation differently six months later.

Clear written documentation gives both sides something to refer back to.

It reduces reliance on memory and helps prevent misunderstandings.

There Is a Consumer Building Guide

If your domestic building contract is valued at $20,000 or more, your builder must provide you with the QBCC Consumer Building Guide before you sign the contract.

A lot of homeowners do not realise this document exists.

The guide contains information about building and contract issues, common pitfalls and what homeowners should understand before proceeding.

It may not be the most exciting document you receive while planning your new home, but it is worth reading.

Building is a significant financial commitment.

Taking some time to understand your rights, responsibilities and the process before signing is time well spent.

And this is really the theme running through all eight of these points.

You do not need to know everything your builder knows.

But you should feel comfortable asking what a document means, why you are receiving it and what you are agreeing to.

A good building process should create more clarity as you move forward, not less.

You Should Receive a Notice of Cover

When the applicable Queensland Home Warranty Scheme premium has been paid, homeowners receive documentation from the QBCC.

That includes a Notice of Cover.

It can be easy to see another automated-looking email arrive and file it away without thinking much about it.

But this one is worth keeping.

The Notice of Cover records important details relating to the home warranty insurance attached to the project.

It is also worth checking the information when you receive it rather than simply assuming everything is correct.

Keep it together with your building contract and other important project documents.

There Is Generally a Cooling-Off Period

Another thing some homeowners are surprised by is that Queensland domestic building contracts over $3,300 generally come with a cooling-off period.

In most circumstances, that period is five business days.

The timing of the cooling-off period relates to when the homeowner receives the signed contract and associated documents, and there are exceptions to the general rule.

The important point is not to treat this as an opportunity to sign a contract you are unsure about.

You should still understand what you are signing before you sign it.

But homeowners should be aware that the cooling-off provisions exist and understand how they apply to their particular circumstances.

Paying Ahead Is Not Necessarily Helping

Sometimes a homeowner may think:

“The work is going well. Why don't I just pay the next stage early?”

That might sound harmless.

It is not something we recommend.

Progress payments exist for a reason.

They should relate to the amount of work that has actually been completed and follow the payment arrangements in the contract.

QBCC specifically warns homeowners against paying more than the contract requires or paying a progress payment before it is due because doing so can reduce the protection available under the Queensland Home Warranty Scheme.

So when a progress claim arrives, understand what stage is being claimed and what work has been completed.

More money paid earlier does not automatically mean the project will move faster.

A well-managed build should follow an agreed process.

Changes During the Build Need to Be Documented

It is very common for something to change during a building project.

You might decide you would prefer a different product.

A detail may need to change because of site conditions.

Or an opportunity might become obvious once you can physically stand inside the home.

These changes are generally handled as variations.

The important part is making sure the change is properly documented.

A conversation on site can be useful, but everyone needs clarity about what is changing and what effect that change has on the project.

That might include the scope, price or timing.

This protects the homeowner as much as the builder.

It means six weeks later nobody has to rely on a conversation that started with, “I thought we agreed…”

Home Warranty Insurance Is Not the Same as Home and Contents Insurance

The name can create some confusion.

Queensland Home Warranty Scheme cover and your normal home and contents insurance are different things.

The Home Warranty Scheme relates specifically to eligible residential construction work and provides protection in particular circumstances under the scheme.

Home and contents insurance is a separate product designed around other risks to your property and belongings, depending on the policy you choose.

One does not simply replace the other.

If you are unsure about what insurance you need during or after construction, ask the appropriate questions early.

Good Questions Are Part of a Good Building Process

There is a lot homeowners are expected to absorb when planning a new home.

Nobody should feel embarrassed asking:

• • What does that mean?
• • Why am I paying this?
• • What am I signing?
• • What happens if something changes?
• • Who sends me that document?

Those are sensible questions.

At Masterbuilt Homes, we would rather explain something clearly at the beginning than have a client uncertain about it later.

Our job is not simply to construct the home. It is also to help our clients understand the process they are moving through.

If you are planning to build in Bundaberg, Bargara or the surrounding region and have questions about what happens before construction starts, we would be happy to talk through your plans and explain the process.