Hi,
We currently have a property with a single house on it. Our intention is to knock down the existing house and build 2 units.We have so far received the town planning permit and the working drawings, and are now at a stage ready to apply for the building permit. Our intention was to become owner builder on these units HOWEVER have been advised that the law has just recently changed and owner builders are no longer allowed to build units. It has to be done by a builder. [grrr]
One way to get around this that I can think of at the moment is to subdivide the land and build individually. BUT I’ve been advised subdivision could take up to 5 months!
Does anyone have any ideas on how we can get around this and still retain the owner builder?
Hi JC007
Please don’t quote me on anything, but here are a couple of thoughts to investigate further.
You may be able to build one of the units as an owner builder if you are prepared to live in it for at least a year. I THINK you can now get an owner builder permit once every 3 years, so maybe build one, then wait and do the other later. Not really what you want I expect.
Another idea I have been toying with is if you have a good relationship with a builder see if they will agree to build it for you, but let you do most work and buy your own materials. You could offer them an upfront fee to cover their risk.
Or maybe get them to do the job on a cost-plus basis, then you subcontract to them and give them a great deal on all your work, which then gets charged back to you. (Confused yet?!!)
With the right company structure this might work, but you have to be friendly with a builder.
Good luck!He is no fool who gives what he cannot keep to gain what he cannot lose. – Jim Elliot
Hi Dougiejg. Couple of good suggestions. The first option is not really feasible as we want the two now.
We are pursuing the 2nd option at the moment [cowboy2] but finding that most builders want a piece of the pie [cigar].
The builders deserve a piece of the pie if they have a part in the project. The question is how big a piece. But if the pie is good, why not share it around?
Remember what Steve says, “Look for the win – win.”
Cheers.He is no fool who gives what he cannot keep to gain what he cannot lose. – Jim Elliot
I agree with Dougiejg
You are expecting a builder to cover the 6 and half year warranty on the construction of two units which you will sell and walk away with a profit, leaving the builder to cover the warranty for the duration on works which you carried out!
I personally cannot see any builder falling for this option as there would not be enough in it for him to cover the 6 and a half year headache! [wacko]
Good point. This is my first time. I forgot about the 7 year warranty period.
JC007, Do you have skills or experience in the area of building? If you do and you are confident that you can do a good job cheaply, then perhaps keep pursuing some way of building yourself. If you are not very experienced I would say think really hard about if you should try to do it yourself.
Building is not an easy game. Many unexpected things can go wrong. Like possums dying in the roof to name one of the least. There is a good chance that you will end up costing yourself more at the end by doing it yourself. It may be better to let a builder take the building risk for a fixed price contract and let him make his profit.
If you want to share some of the risk, then you may be able to get a cost-plus contract, but this leaves you wide open to blow outs.
Good luck with the deciding.He is no fool who gives what he cannot keep to gain what he cannot lose. – Jim Elliot
I just went to a short seminar last night about Owner Building and they didn’t suggest a way around building more then one unit.
They did say that there was a loop-hole where an Owner Builder could develop more then one property in three years.
This is residential houses and in Victoria.
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Interested in Joint Venture Reno ProjectsHi guys,
I thought I’d put some closure to this thread. After weeks of heartache trying to find a workaround I decided to have a chat to someone from the building practioner’s board (the ones that provide consent to build). Found out that they go according to the applicant’s name and not the title holders. Obviously you must be a title holder to apply as an owner builder.
In this case it was a JV and there were 2 title holders. All we had to do was apply seperately (pay 2 application fees) and wallah….approved!!
This does not solve the problem of owner builders wanting to build more than 1 unit within 3 years.
Depending on how this project turns out…if I want to progress with more units I will most likely use a registered builder anyways.
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