Pursuant to section 5 of the Domestic Building Contracts Act 1995 (Vic) (the Act) what constitutes “Domestic Building Work” is given a particularly wide application and includes what is relevant to your proposed work:

• The renovation, alteration, extension, improvement or repair of a home;
• Any associated work to do with the erection or construction of a home;
• Any work associated with the construction or erection of a building in respect of which a building permit is required; and
• Any work that the regulations state is building work for the purposes of the Act.

It is a requirement under the Act and Regulation 6 of the Domestic Building Contracts Regulations 2017 (Vic) (the Regulations), to enter into a ‘major domestic building contract’ for any building work above $10,000.00.

Essentially this means that any building work that exceeds $10,000.00 (including the cost of materials) must be done so under a compliant Domestic Building Contract if that work comes under the above monetary benchmark.

Pursuant to Section 29 of the Act, only a Registered Building Practitioner can enter into a Domestic Building Contract. This is to afford protections to consumers, ie: owners in domestic building contracts.

There are however, exceptions to this. A Domestic Building Contract is not required for jobs that involve one only of the following, even if they exceed the monetary benchmark:

• plastering
• tiling (wall and floor)
• electrical work
• glazing
• insulating
• painting
• plumbing, gas-fitting and draining
• installing floor coverings
• attaching external fixtures (awnings, security screens, insect screens and balustrades)
• erecting a chain wire fence around a tennis court
• erecting a mast, pole, antenna, aerial or similar structure.

What if you are a sub-contractor?

The situation is slightly different in circumstances where a person is engaged under a sub-contractor agreement.

It is an offence pursuant to Section 169F of the Building Act 1993 (Vic) (the Building Act) to carry out building work under a major domestic building contract unless you are a registered builder.

The exemption to this comes under section 169F(2)(c) & (d) if you are carrying out building work as a sub-contractor under a sub-contract with a registered builder.

Given that the exemption above applies only to work completed under a sub-contract, often times sub-contractors find themselves in trouble by not ensuring that their position as a sub-contractor is clear even in circumstances where there is an ‘owner-builder’.

In the VCAT case of Owusu-Afriyie v Panoramic Structures and Pools Pty Ltd (Building and Property) [2016] VCAT 485 a concreter completing concreting works for an ‘owner-builder’ was held to be operating as a ‘builder’ instead of a sub-contractor despite the fact that his work involved only concreting and paving works.

The case raises two questions which any sub-contractor should consider so as to be satisfied that they are carrying out work as a sub-contractor:

• Is there a contractual intermediary? In other words, is the contract between the client and the person or company that is to undertake the building work directly?; and
• Is there a contract between the person or company that will be undertaking the work and a registered builder that includes the building work?

Sub-contractors should be diligent to ensure that any work they are doing for an owner directly is completed under a Domestic Building Contract if that work is above $10,000.00.

They should also have close regard to insurance requirements under the Act to ensure that their interests are protected. For instance, in circumstances where building work exceeds $16,000.00, Domestic Building Insurance must be taken out as a requirement under the Act.

This is a Lovegrove and Cotton publication, authored by Ahmad Ali.

Disclaimer

This article is not legal advice and discusses it’s topic in only general terms. Should you be in need of legal advice, please contact a construction law firm. The experienced team at Lovegrove & Cotton can help property owners and building practitioners resolve any type of building dispute.