Hi All Just wondering if anybody has utilized a known persons builders licence to build a duplex i.e. paid them a fixed fee and managed the job yourself? If so can you please assist with the following queries, that would be very helpful? My reasoning for this is; 1. I work full time in commercial construction management but I'm not licenced for residential work 2. I've recently purchased a duplex viable block at a decent price 3. Price is not decent enough to use a well known volume builder and be profitable 4. Quoted rates are pretty meaty and I think there is a lot of fat there that I am willing to work for 5. I know of 2 people that may entertain this for me, but there is no guarantee 6. I have access to commercial trades that will do heavily discounted work for me Queries; 1. How did you structure the finance as banks always request a lump sum quote? 2. How much did you pay them? is $25,000 appropriate, and then you bear all costs incl warranty? 3. Any mistakes in your experience? 4. Any recommendations for builders that would do this? 5. Have you done multiple projects? if so, have you compared this to a volume builder? 6. Any alternative to this that are able to be financed i.e. lockup stage? structure only? Thanks in advance
If you use a builder (even just for their licence) they will bear all the warranty risk. It’s a risk that many builders wouldn't be OK with - especially if they aren't supervising the work or using their own trades. Why not owner build?
Missed the detail about the duplex. I can see how a duplex would be at odds with the intention of allowing owner building.
Are you confident that even with a volume builders 20-25% margin that you can build it cheaper? Personally I wouldn't do it unless I was supervising and using my trades, as it is hard to warrant work I haven't had control over.
Some builders do it, a lot of people want to do it. I have heard $15k per build so $25k might be in the ballpark for a duplex. It's often a builder who is a friend doing it for a mate to help out. Builders would mainly do it for people who they really trust but then still keep a rough eye on things. I know builders get a lot of offers from people who want to do this so there would have to be a good reason for them to do it for you.
From a risk management and headache point of view it's not really a great idea. But working in commercial project management I do projects around the $20 to $40 million mark and have good relationships with trades that would do work for free. Hence I'm wanting to capitalize on it from that perspective. That's the only reason I think I can bring it under, otherwise if it weren't the case I could not beat a volume builder.
I wouldn't be able to OB due to financing from the bank anyway, and I don't have the equity for meeting the LVR requirements of owner builder loans.
Can't owner build due to cash / financing and LVR's. You are right on the warranty aspect one volume builder I proposed using my trades said no (you don't know if you don't ask). I was hoping that my existing commercial construction experience would mitigate some of the building risk in a scenario like this as I have heard stories, could be false, who knows, of people paying a fee and just building themselves (with no experience).
Consider how the nominated builder who will be up for the warranty will be able to handle trades that work for free - how is their work warranted if it's done as a favour. I'm sure they are reputable trades who've you used before but will they want to be doing all the paperwork and certification on jobs that are a favour (or kickback for getting commercial work?) If I was a builder I wouldn't be putting my license on the line with trades I don't know for $15-25k. I'd want substantially more.
With the trades I'm hoping to use, specific certification is not required for hand over (i.e. concreting, framing, tiling, gyprocking, joinery, architectural timbers and doors) but you are right, whoever licence it is does warrant. It's a risk I haven't formed a plan for, but if this project eventuated in this fashion (i.e. pay a fee then build) those particulars will need to be resolved ahead of time. Hoping somebody who has actually undertaken this can advise me, as the few people I know that do this are very shy on details and not forth coming with the information. My assumption is, people are doing it, so naturally there is a work around.
Is this legal? What risk do you carry if things go wrong? What risk does a builder carry if things go wrong and you or someone else dobs him in to the board who oversees his licence? Would an electrician sign off on something he didn’t do? I would be doing the owner builder course and doing it myself rather than ask this of any builder.
What risk does a builder carry if things go wrong and you or someone else dobs him in to the board who oversees his licence? - It's not specifically illegal, a licenced builder can carry out profit making work in whichever structure they prefer it's just very risky as if they carry this arrangement with a person that has no idea a lot of mistakes can be made, so it's not recommended at all. The licenced builder carries home warranty risk for 6 years. - In terms of dobbing him in, it is really situational to what the problem is? For example, if the slab fails majorly and you carried out all your work in accordance with the design and and documented your QA and cannot find any fault in the workmanship, then you would be looking to blame the designer and pursuing the engineers indemnity. Likewise the waterproofing fails, and you did your QA, you would be pursuing the water proofer. It's a common misconception that people finger point the builder always as that is there point of contact, behind the scenes builders always pursue the people carrying out the work or design. You would identify high risk trades and then just make sure you engage professionals for that. I am only talking about engaging low risk trades of mine like painters, joiners, gyprockers, carpenters etc. the rest will be certified. Would an electrician sign off on something he didn’t do? Trades like Electrical, Hydraulic, Waterproofing, Termite Control you just wouldn't even try doing yourself. Licenced trades is the only way to go as they need to provide hand over certification. Structural trades work gets signed off by the engineer and council. I would be doing the owner builder course and doing it myself rather than ask this of any builder. Cannot build a duplex on an owner builder and you are lucky to get finance approved at anything higher than 60% LVR of the project value, if that.
