The Victorian Building Authority (VBA) has advised that kit home suppliers need to be registered builders if they are also installing the homes that they sell.
This timely reminder comes as a supplier and its director in Bendigo, Victoria were found guilty by a magistrate for building a kit home with being registered as a builder.
The company argued in the case that it was not the builder as, after entering into a contract with the property owner in 2011 to install a kit home for $37,900, the owner then obtained a building permit as an owner-builder.
The Magistrate didn’t accept this, however, saying that it supplied the materials and acted as subcontractor to the owner. As soon as it agreed to install the house, the company then became the builder.
There were further disputes as to the amounts of money involved, as the company claimed that it hadn’t breached the threshold figure of $5000 – above which figure, work must be carried out by a registered builder. Again the Magistrate determined that the costs of the building materials should have been factored into the total cost of the work.
For carrying out work when not registered as a builder, the company and the director were each fined over $11,000. Other misdemeanours included not having a proper contract or the required insurance and asking for a deposit of more than five percent.
The test case clears up what has been a murky area of law says VBA chief executive officer, Prue Digby.
“The matter of who the builder is in relation to kit homes has caused some confusion in the past,” she says. “This case makes it clear to the industry and homebuyers that anyone who supplies a kit home and then installs it, is considered to be carrying out major domestic building work. This means that the work must be done by a registered builder and a proper contract must be in place.”
And if the total cost of the contract exceeds $12,000, the builder is required to have the appropriate insurance.