# Forum More Stuff Owner Builders Forum  Carpenter vs Builder (Victorian Building Authority)

## Ghoti

Hi all, 
As per the VBA Owner-Builder guide, "Whenever you contract out domestic building work over $10,000 in value (includinglabour and materials), you must enter into a major domestic building contract....Only a registered domestic builder can enter into a major domestic building contractwith an owner-builder". 
<begin whinge> So what's the point  in registering as an owner-builder if you have to engage a registered builder anyway? </end vent> 
Does this only include materials provided by the contractor, or does it include materials I supply?  More to the point, what happens if I'm really happy with the work done and wish to engage them to do other tasks?  It would seem to me then that to build a timber house as an owner builder you would need to engage multiple chippys or 1 builder.

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## UseByDate

> Hi all, 
> As per the VBA Owner-Builder guide, "Whenever you contract out domestic building work over $10,000 in value (includinglabour and materials), you must enter into a major domestic building contract....Only a registered domestic builder can enter into a major domestic building contractwith an owner-builder". 
> <begin whinge> So what's the point  in registering as an owner-builder if you have to engage a registered builder anyway? </end vent> 
> Does this only include materials provided by the contractor, or does it include materials I supply?  More to the point, what happens if I'm really happy with the work done and wish to engage them to do other tasks?  It would seem to me then that to build a timber house as an owner builder you would need to engage multiple chippys or 1 builder.

  I don't read it like that. If it is like SA then you don't have to engage a builder at all. You can DIY.  
 The $10,000 refers to the “value” of the work, so it includes all the labour and all materials used to complete the work. It also includes overheads like insurance. It does not matter who supplies the materials.
Splitting up a job into multiple sub $10,000 contracts is also “frowned” upon.

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## Bros

You may want to contract a part of the building like erecting the frame and you have to get a contractor if it is over $10,000 to do that but if you get a plumber or electrician you can enguage them directly and a builder is not needed. 
Thats how I read it.

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## r3nov8or

You have a syntax problem. 
You can't start with a winge and then end a vent   :Biggrin:

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## Ghoti

> You have a syntax problem. 
> You can't start with a winge and then end a vent

  Just shows how confused I am  :Redface: )  
And back on topic, I intend to subcontract all the trades.  I plan to use pre-fab wall frames and trusses. I have a son that works on a framing gang that works for Metricon and he's not a chippy, so I planned to engage the chippy to help erect them, but the prefab costs exceed $10K.  It seems odd I can DIY, but to use a qualified Chippy to assist he needs to be a registered builder.   :Confused:  :Confused:

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## Godzilla73

Your reading to much into it, if you have an owner builder permit you are the builder. The contract bit is to cover both parties bums, you have it in writing the extent of works agreed too. I'd be getting anything over $500 written up. The person you hire may well be a RBP but its your project.  
Have fun with it, I really enjoyed our owner builder experience. It has its moments but the end result is well worth it.

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## joynz

> Hi all, 
> As per the VBA Owner-Builder guide, "Whenever you contract out domestic building work over $10,000 in value (includinglabour and materials), you must enter into a major domestic building contract....Only a registered domestic builder can enter into a major domestic building contractwith an owner-builder". 
> <begin whinge> So what's the point  in registering as an owner-builder if you have to engage a registered builder anyway? </end vent> 
> Does this only include materials provided by the contractor, or does it include materials I supply?  More to the point, what happens if I'm really happy with the work done and wish to engage them to do other tasks?  It would seem to me then that to build a timber house as an owner builder you would need to engage multiple chippys or 1 builder.

  Just call the VBA and ask.   
I dont think you need to engage a builder, but you are required to use licensed trades for work over a certain cost -  _from_ _memory_ (not sure if everyone does though).  There might have been changes in the 3 years since I looked into it.

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## UseByDate

> Just shows how confused I am )  
> And back on topic, I intend to subcontract all the trades.  I plan to use pre-fab wall frames and trusses. I have a son that works on a framing gang that works for Metricon and he's not a chippy, so I planned to engage the chippy to help erect them, but the prefab costs exceed $10K.  It seems odd I can DIY, but to use a qualified Chippy to assist he needs to be a registered builder.

  Just my opinion but:
 I would see a big difference between contracting a chippy to manufacture and erect a frame, and contracting a chippy to erect a frame that is already manufactured. In the second case you have no choice but to have two contracts. One with the frame manufacturer and one with the chippy.
 Just check with the council to make sure.

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## joynz

> Hi all, 
> As per the VBA Owner-Builder guide, "Whenever you contract out domestic building work over $10,000 in value (includinglabour and materials), you must enter into a major domestic building contract....Only a registered domestic builder can enter into a major domestic building contractwith an owner-builder". 
> <begin whinge> So what's the point  in registering as an owner-builder if you have to engage a registered builder anyway? </end vent> 
> Does this only include materials provided by the contractor, or does it include materials I supply?  More to the point, what happens if I'm really happy with the work done and wish to engage them to do other tasks?  It would seem to me then that to build a timber house as an owner builder you would need to engage multiple chippys or 1 builder.

  You’ve got it completely wrong! 
Here is what the VBA actually says: 
’*Remember, even if you have signed as an owner-builder on the application form for a building permit:* *You will need to enter into a major domestic building contract when a registered domestic builder, contractor or tradesperson will do domestic building work costing more than $10,000 (unless a single trade exemption applies);**A builder, contractor or tradesperson must give you domestic building insurance for work costing more than $16,000;**Warranties still apply.’  (*Source VBA website)

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## JB1

I'm currently OB at the moment. No chippie is going to give you a domestic building constract/insurance. Well I'm some tradies could but they'll charge you a fortune for it.  
If you had to, you may as well not OB as you'll be saving zilch. 
But good luck getting domestic building insurance policy from a concreter, roof tiler, brickie, floorboard contracter etc.  
The law is there to protect you, but if you're willing to take the risk without a domestic building contract/insurance then who is going to force you to? If you're owner building one hopes you have some idea of what's going on. 
I get a written quote/receipt from each trade and that's about it. Haven't had to pay a deposit (less risk to me) but had to pay progress payments to tradies at each completed stage. A bit of trust required from both parties.  
....

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## UseByDate

> You have a syntax problem. 
> You can't start with a winge and then end a vent

  https://www.youtube.com/embed/SMCsXl...art=76&end=100  :Smilie:

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## Ghoti

> Youve got it completely wrong! 
> Here is what the VBA actually says: 
> *Remember, even if you have signed as an owner-builder on the application form for a building permit:* *You will need to enter into a major domestic building contract when a registered domestic builder, contractor or tradesperson will do domestic building work costing more than $10,000 (unless a single trade exemption applies);**A builder, contractor or tradesperson must give you domestic building insurance for work costing more than $16,000;**Warranties still apply.  (*Source VBA website)

  Sorry, not sure who has what completely wrong.  I think you're saying a contract is only mandatory _if_ a registered builder is engaged.  Whereas I think the VBA are saying one _must_ engage a registered builder for domestic building work valued at over $10,000, therefore negating the benefits of being an Owner Builder (unless you DIY). 
In the "Owner Builder Study Guide" (v August 2017/1.8) Page 18 reads:   

> If you are engaging someone to undertake domestic building work valued at over $10,000 (including labour and materials) then, unless an exception applies, you must engage a registered domestic builder who is authorised to do the work and enter in a major domestic building contract.

  The exceptions are listed on Page 16 as:  

> An exception applies however where a tradesperson is undertaking a single trade only to do any of the following:
>  Attaching external fixtures (including awnings, security screens, insect screens and balustrades)
>  Electrical work
>  Glazing
>  Installation of floor coverings
>  Insulating
>  Painting
>  Plastering
>  Plumbing work
> ...

  Following the exceptions, it goes on to say that:   

> Where the same tradesperson carries out more than one type of trade, and the combined value of these trades exceeds $10,000 (for example, the tradesperson does plastering and painting work), a major domestic building contract is required.  Only a registered domestic builder can enter into a major domestic building contract with an owner-builder.

  On Page 17 they even address the subject of staged/phased contracts by saying:  

> Owner-builders should be cautious about engaging tradespersons who seek to avoid their major domestic building contract obligations.For example, you should be cautious of any tradesperson who tries to split trades so they fall below the $10,000 value threshold, or who tries to split contracts(e.g. by creating a pre-construction contract worth $4,000 and a main contract worth $8,000).

  Hence my concern that only a registered builder can be contracted to erect my pre-fab walls and trusses given value of the materials (i.e. walls and trusses)  exceeds $10,000 to which I need to add the Chippy's labour.   Heaven forbid I get lazy and also ask the Chippy to replace my weatherboards! 
I guess I'll just have to stew on it until the VBA opens on Monday. 
Damned hot weather has me doing too much reading  :Biggrin:

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## joynz

Builders registration for some one who can build a whole house (Domestic builder unlimited - DBU) is different from the builder’s license needed to do just a single aspect (Domestic Builder Limited - DBL).  DBL can be held by a single trade like brick laying carpentry etc.   
The problem may be in finding people in those trades who hold the DBL license - because they may tend to be subbies for DBU builders.

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## Ghoti

Finally got around to calling the VBA today.   
They confirmed that any person engaged to participate in work over $10K must be a registered builder and enter into a major domestic building contract.   
They confirmed that includes hiring a chippy for a couple of days to stand walls and trusses.  Even though their contribution may only be worth, say $1000, they still must be a registered builder and enter into a major domestic building contract as total value of labour + walls + trusses exceeds $10K.  This applies even if I hired the Chippy on two different occasions - one to stand walls and one to stand trussses - as the total value of the work done exceeds $10K.  They advised that the $10K is inclusive of GST.  However,  if I was to hire 2 chippys, one to stand the walls and a different one to stand the trusses, then they would not need to enter into a major domestic building contract..  Gimme a break  :Doh:

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## JB1

Did you ask them what would happen to you if they weren't a registered builder and you did not enter in a major domestic building contract?

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## intertd6

> Finally got around to calling the VBA today.   
> They confirmed that any person engaged to participate in work over $10K must be a registered builder and enter into a major domestic building contract.   
> They confirmed that includes hiring a chippy for a couple of days to stand walls and trusses.  Even though their contribution may only be worth, say $1000, they still must be a registered builder and enter into a major domestic building contract as total value of labour + walls + trusses exceeds $10K.  This applies even if I hired the Chippy on two different occasions - one to stand walls and one to stand trussses - as the total value of the work done exceeds $10K.  They advised that the $10K is inclusive of GST.  However,  if I was to hire 2 chippys, one to stand the walls and a different one to stand the trusses, then they would not need to enter into a major domestic building contract..  Gimme a break

  dont pay much attention to the bureaucrats, most of them don't understand the regulations they are supposed to enforce, if you're an owner builder you can do & erect your own frames & trusses if you want, that's your right as an owner builder, they have added the condition that you have to be supervised by an builder whatever that means,  As mentioned before it'd be a rare occurrence that you'd find any trades who are sole traders engaging in written contracts for single domestic dwellings.
inter

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## joynz

> dont pay much attention to the bureaucrats, most of them don't understand the regulations they are supposed to enforce, if you're an owner builder you can do erect your own frames & trusses if you want, that's your right as an owner builder, they have added the condition that you have to be supervised by an builder whatever that means,  As mentioned before it'd be a rare occurrence that you'd find any trades who are sole traders engaging in written contracts for single domestic dwellings.
> inter

  Yes, I think you can erect your own frames in Victoria too - as an owner builder.  But Ghoti has been advised that,  if you engage someone else to do it, they have to be registered as a builder for that trade if over a certain $ figure. 
In Victoria, there are fines for not complying with the requirements.  Not sure how likely to be discovered - but best to be aware. 
Incidentally, a builder friend just told me of a building permit loophole that will soon be closed that will affect all builders.  Currently in Victoria, when you get a permit for $100,000 of building work, there is a proportional fee.  Any variations escape being charged a fee.  Soon, new regulations will come into effect where any variations will be added to the fee calculation.

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## manofaus

I was told just today that an owner builder is considered a registered builder for a project if they hold the permit. But only for that permit. I can engage anybody I like to do the work, but I need a contract if it is over 10k. But that contract can be from anyone who supplies a service I utilise. Air con for example. But I am in NSW too. In your scenario are you saying if you are going to install a ducted air con system that’s more then 10k you need a builder to supply the contract?

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## joynz

The VBA website has a list of single trades/exceptions which don’t need to be registered builders. 
For example, plastering or painting.

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## Ghoti

@manofaus Plumbing and Electrical are exemptions, so that would cover your $10K airco.  However if you purchased a magnificent $10K entrance door, you would need to contract a registered builder to hang it.  Indeed if the door was particularly magnificent and cost $17K, the registered builder would need to enter into a major domestic building contract to hang it.    
@JB1, the Owner Builder Study Guide, page 16 states:  

> You will commit an offence unless you have taken reasonablesteps to ensure that the person you contract with is a registered building practitionerwhose registration authorises them to carry out the work you have contracted them todo. A maximum penalty of $9,514 applies for a first offence and $19,028 in the case of asecond or subsequent offence.

  @joynz is correct.  As a ham-fisted well-intentioned newby who doesn't know which end of a hammer to use I am welcome to stand the wall frames and trusses myself (they still need to pass inspection).  However, I cannot employ a qualified carpenter, who isn't a registered builder, to do it if the total value of the work (pre-fab & labour to erect) exceeds $10K.  I wonder how I'd go if I employed the chippy to stand the walls, and employed his apprentice to stand the trusses  :Confused:

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## UseByDate

Cash is king. Just saying.  :Wink:

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## r3nov8or

"He didn't touch a hammer, just popped in to see how I was going"

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## joynz

> Cash is king. Just saying.

  Don’t forget that the major reason for these requirements (which have become more stringent in the last few years) is to stop owner builders getting burned by dodgy workers and prevent dodgy work. 
A tradie happy to do a cash job for a stranger  may not be the kind of tradie that does a good job.  The contract you need these days very likely provides useful protection.

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## intertd6

The other thing to remember is all theses regulations normally only apply to contractors, if the owner builder employs people on wages none of these rules apply.
inter

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## joynz

> The other thing to remember is all theses regulations normally only apply to contractors, if the owner builder employs people on wages none of these rules apply.
> inter

  Is this comment based on experience/research of Victorian system or just a guess?

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## intertd6

> Is this comment based on experience/research of Victorian system or just a guess?

  It is based on the fact that building contractors employ thousands apon thousands of skilled building workers who have no building registration yet work under their building registration, for instance a worker assembling Windows offsite in a factory for a domestic house with a window contract worth more than $10,000 won't have a builders registration to perform that work, the regulations are poorly written & not enforceable as the precedent is unpractical to the industry.
if the bulk of the building industry workers aren't registered why should a particular section of it be singled out and over regulated.
inter

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## joynz

Inter - Since builders must pay work cover levies, super  and a range of other costs when they pay wages, it might not necessarily provide an advantage - cost or otherwise - for an owner builder to go this way (assuming it does bypass the contracts/licensing issue).   
Also, if payed by the hour, there is no incentive to work fast.  
Incidentally, by the end of 2019 in Victoria, 5 other single trades including concreters, bricklayers and plasterers will all be required to be registered. 
Ghoti - my builder friend reckons owner builders don’t save any money as the trades they hire charge more than they would to a builder.  So the 20% builders margin saving is quickly eaten up.

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## intertd6

> Inter - Since builders must pay work cover levies, super  and a range of other costs when they pay wages, it might not necessarily provide an advantage - cost or otherwise - for an owner builder to go this way (assuming it does bypass the contracts/licensing issue).   
> Also, if payed by the hour, there is no incentive to work fast.  
> Incidentally, by the end of 2019 in Victoria, 5 other single trades including concreters, bricklayers and plasterers will all be required to be registered. 
> Ghoti - my builder friend reckons owner builders dont save any money as the trades they hire charge more than they would to a builder.  So the 20% builders margin saving is quickly eaten up.

  A owner builder is a builder for a one off project, theoretically there should be no difference in costs unless the subcontractors are not making comparable wages, you see guys here thinking they are making a good living at $45/hr, they are shooting themselves in the foot & doing the rest of the industry a disfavour & are around $25/hr down on comparable wages, a successful plumber or electrician running their own business wouldn't get out of bed for under $75/hr because there's no future in an industry that does work for under the cost of wages which is what carpenters & builders do & as result of that they live hand to mouth & take stupid risks working below reasonable profit margins. As a result the people who fund building expect them to keep it going & depressed because they have been conditioned & gotten away with it for so long, there needs to be a stronger builders & carpenters professional association that recommends minimum rates & protection from government red tape & unreasonable lender power to suppress reasonable rates & working conditions of the building industry .
inter

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