Home building laws in every state or territory ensure tradespeople have appropriate qualifications for the work they perform on residential properties. However, the home building laws do not cover all trades. If you are a tradesperson in Tasmania, the Residential Building Work Contracts and Dispute Resolution Act 2016 (the Act) may apply to you. This article will explain when and how you comply with home building laws in Tasmania and how you can resolve disputes under the Act.
How Does the Act Define Residential Building?
The Act defines residential building (or home building) quite broadly. The definitions are based on the National Construction Code, which splits the types of residential buildings or structures according to Class:
- 1A;
- 2; or
- 10, if the building is associated with a class 1A or Class 2 building.
Class 1A buildings are:
- a single dwelling such as a detached house; and
- one of a group of attached dwellings such as a townhouse.
Class 2 buildings are:
- apartments;
- multi-unit buildings that share common walls, floors and ceilings; and
- single-story attached places with common space, such as two units above a common carpark.
Finally, class 10 buildings are:
- sheds;
- carports;
- private garages;
- fences;
- masts;
- antennas;
- retaining walls;
- swimming pools; and
- private bushfire shelters.
For example, a carport located at a house is a residential building, even though you may not use the carport as a residence.
Residential Building Work
Therefore, residential building work refers to any work on buildings that fall under the definition of residential buildings.
Likewise, typical residential building work includes activities such as:
- erection, re-erection, construction, alteration, repair or removal of a residential building (including a house);
- adding to, or removing any part of a residential building;
- plumbing (including stormwater and sewerage systems) and fire safety systems works;
- prefabrication of components that will form part of a residential building;
- electrical works, including lighting, heating, ventilation, air conditioning or cooling);
- installation, repair or removal of systems such as fire safety systems, plumbing systems, security systems, gas systems and sewerage, water and draining systems;
- landscaping and paving; and
- painting, cleaning and decorating.
Residential building work also includes the preparation of land where a tradesperson will carry out any of the above types of work. Accordingly, this includes site clearance, excavations, earth-moving, foundation works and work required to access the land (including an access road).
Continue reading this article below the formWhat Does the Act Exclude?
A ‘residential building’ does not include:
- a caravan, trailer, aeroplane or boat used as a residence;
- boarding house, hostel, motel, hotel or overnight holiday accommodation;
- university accommodation, hospitals and prisons; and
- apartment blocks with three or more levels.
Additionally, the Act also excludes many types of building works. Some of these exclusions are:
- delivery of materials for the construction work;
- work for subdividing land; and
- work that the Act exempts.
Contract Requirements
If you perform residential construction work and your contract is worth more than $20,000, the Act will apply to you.
Notably, there are certain contract requirements under the Act. For example, contracts must:
- include the statutory warranties, party details and the builder’s licence details;
- state the contract price or a method to work out the price;
- state the date when the works will be finished or a method for estimating the date;
- attach a signed copy of the residential building guide, with the completed checklist of key contract requirements;
- provide a cooling-off period of five business days; and
- not contain a deposit of more than:
- 5% if the contract value is over $50,000;
- 10% if between $20,000 and $50,000; or
- 20% if half the contract price relates to work carried out off-site, such as using prefabricated concrete.
Warranties
Your contracts should set out warranties. That means as a tradesperson, you guarantee that:
- all materials supplied are of good quality;
- all materials supplied will be new;
- the work will comply with all relevant laws;
- you will carry out the work with reasonable care and skill;
- you will carry out the work all according to plans or specifications;
- the home is fit for occupation when the work is complete;
- all work carried out is completed with reasonable diligence to the agreed or estimated timeframe; and
- any estimated costs are calculated with reasonable care and skill-based on the information available at the time of entering the contract.
The warranties will last for six years from the date of practical completion. The date of practical completion is the time where the contractor will complete the work sufficiently, not including any minor defects.
A subsequent purchaser of the residential building (or home) will have the benefit of the statutory warranties for the warranty period.
Licences
In Tasmania, the trades that require a licence include:
- electricians;
- plumbers;
- gas-fitting workers, including auto-gas fitting; and
- building services providers, which spans occupations such as builders, architects, engineers and surveyors.
If the above list does not cover your trade (such as painting), you will not need a licence to carry out home building work.
How Do I Resolve Disputes Under the Act?
The Act includes two methods for resolving disputes. First, if a dispute arises between the tradesperson and the homeowner, the parties can settle the dispute by mediation or adjudication.
Mediation is optional. However, it is only available if the dispute has arisen under a contract valued at $20,000 or more. The Director of Building Control may accept or reject a notice of dispute. If accepted, the dispute will be determined by mediation. If the dispute is resolved at mediation, the decision can be registered and will be binding on the parties.
Conversely, if a dispute is not resolved at mediation, the owner can apply for adjudication of the dispute by serving a work completion claim on the tradesperson. The tradesperson is entitled to lodge a response. The Director may accept or reject the application. If accepted, an independent panel will determine the dispute, and their decision will be enforceable.
Know which key terms to negotiate when buying a business to protect your interests and gain a favourable outcome.
Key Takeaways
If you carry out any residential work and have a contract valued at $20,000 or more, you will have to comply with the Act. You will have to include important provisions in your building contracts as part of your compliance. However, depending on your trade, you may not need to apply for a licence before carrying out any home building work.
If you need help understanding how the residential building laws in Tasmania apply to you, our experienced construction and building lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
The Residential Building Work Contracts and Dispute Resolution Act 2016 defines residential buildings according to three different classes: 1A, 2 or 10. It excludes places like a caravan, trailer, aeroplane or boat used as a residence, amongst others.
The Act includes two methods for resolving disputes. If a dispute arises between the tradesperson and the homeowner, the parties can settle the dispute by mediation or adjudication.
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