Home building laws in every state or territory ensure tradespeople are appropriately qualified for the work they perform on residential properties. However, the home building laws do not cover all trades. If you are a tradesperson in South Australia (SA), you need to know when the Building Work Contractors Act 1995 (SA) (the Act) may apply. This article will explain when and how you comply with home building laws in SA.

How Does the Act Define Home Building?

The Act defines domestic building work as:

  • constructing, erecting, underpinning, altering, repairing, improving, adding to or demolishing a house; or
  • excavating or filling a site (for the above work).

The definition also includes:

  • construction, alteration, repair or improvement of a swimming pool or spa within the external walls of a house; 
  • any other building work carried out within the surrounding land of the house or on the land boundaries of the house
  • insulation works; 
  • painting; 
  • installation of air-conditioning; 
  • installation of solar panels; and
  • plumbing, gas fitting and electrical work. 

What Does the Act Exclude? 

SA does not expressly exclude types of trades from coverage under home building laws. Instead, the Act excludes any type of work on building sites that are not a “house”.

Under the Act, a house is a place of residence intended for occupation. That definition excludes:

  • hotels;
  • motels;
  • youth hostels;
  • residential camps;
  • boarding or lodging houses;
  • university halls of residence;
  • boarding school dormitories;
  • barracks;
  • nurses homes; and
  • residential facilities for workers or training purposes.

Contract Requirements

The Act groups contracts according to whether they are minor domestic building work or domestic building work. A minor domestic building work contract involves work that is valued less than:

  1. $5,000 for contracts made before 15 October 2001; or
  2. $12,000 for contracts made on or after 15 October 2001.

That definition means these type of contracts do not have to comply with any specific requirements under the law. However, if your building contract is not a minor domestic building contract, your contract must:

  • be in writing and contain all contractual terms;
  • set out the name and licence details of the contractor;
  • ensure both parties sign the contract and the owner receives a copy;
  • include certain restrictions if the contractor lodges a caveat over the property where they perform the works;
  • contain a fixed price or a notice that the contract price can change. For example, if the price is an estimate you must include the words “this price may change” or “estimate only”;
  • state that the contract can only serve progress payments based on work or services carried out;
  • explain whether the contractor will add the goods and services tax (GST) to the contract price;
  • only include a maximum deposit of 20%;
  • include home indemnity insurance coverage; and
  • include a five business day cooling-off period (for the homeowner) if the contract does not have mandatory insurance, price or warranty provisions.

Warranties

Your contracts should set out warranties or guarantees of quality work. As a tradesperson, that means:  

  • you will perform the work properly based on the plans and specifications in the contract;
  • all materials you supply for use in the building work are good and proper;
  • the work will be performed as required by law;
  • you will perform the work with reasonable diligence, if the contract does not state when you must complete the work;
  • the house will be reasonably fit for human habitation; and
  • if the building owner has stated the purpose of the building, you will perform any work with materials that are reasonably fit for that purpose.

Licences

You should get a licence from the SA government before you perform any home building. Otherwise, you may receive fines for performing unlicensed work.  As a tradesperson, you should apply for a building work contractor’s licence. To get a licence, you will need to:

  • prove your financial position;
  • demonstrate the right knowledge and experience; and
  • get a police check.

For example, if you are a carpenter restricted to doing specific carpentry on a building site, you will need at least $10,000 in net assets to apply for a contractor’s licence. If you do not have enough money, you can only apply for a restricted licence as a subcontractor.

Key Takeaways

Unlike other states or territories, SA does not expressly exclude particular trades or types of work. However, that means you must pay attention to your contractual and licence requirements under the Act.

If your contract is not otherwise classified as a minor domestic building work contract, you will need to ensure your contracts contain the relevant clauses. In addition, you must obtain a licence before you start any work on homes. If you have any questions, get in touch with LegalVision’s building lawyers on 1300 544 755 or fill out the form on this page.

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.
Robert Nay

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