Renovation rather than taking the next step on the property ladder can be tempting strategy as it avoids taxes such as stamp duty that can add significantly to the costs of upgrading.
Yet, there’s a tax to renovation – the taxing of your stress levels.
Many home owners come away from a renovation scarred and so unhappy with the entire process they choose to cash out and sell anyway. In the worst cases, you can end up in court over poor quality workmanship, materials and broken deadlines.
If you employ a builder, you must face the reality that you will need to be constantly vigilant to ensure for quality outcomes and, on some days, wonder why no one has turned up at your property to get the work done.
Here are seven some tips to help manage the process:
A is for architects
For a big job, an architect can play a pivotal role. Among their many contributions, they’ll draw up plans with you and help get them through council. For an extra charge, they’ll work with the builder until the project is completed. This gives you an ally, keeps you at arm’s distance from the action and will significantly ease your stress levels.
Rely on reputation
Word of mouth recommendation is the most reliable method to select a builder, if you are not using the services of an architect. Do not choose a builder based solely on finished work. You’ll have no idea of how the project rolled out and whether the client was happy with the work or customer care provided. Your research of available builders is arguably the most critical factor in any renovation.
Take your time with the plans
Many building companies will provide architect or drafting services, often via a sales representative. There’s nothing wrong with this, but you must make sure you get absolutely everything you want included in the plan. Changes on the fly are super-costly and give the builder serious wiggle room around completion deadlines. If you think you’re the type of renovator who will alter plans as you go, it will be cheaper to employ an architect. They’ll help contain costs and make sure you don’t blow your budget, or warn you before you do.
Contracts set the rules
A contract will include the finalised plans, budget, completion deadline and caveats around what might be unforeseen issues for which the builder might increase their price. The Master Builders’ Association has a standard contract on its website. Once signed, you’re locked in. Frustrations around a builder’s ad hoc work days, and periods where nothing seems to happen, are all part of the experience. You might want to sack your builder a hundred times, but it really must be an action of last resort. Word will get out about your job and your behaviour as a client (whether true or false), and finding a replacement builder might not be as easy as you’d assume.
Penalties create focus
No builder will propose a penalty for missing a deadline in the contract they will present to you. Therefore, you will need to negotiate not just the penalty but its inclusion in a contract. You will need to include an allowance for days with bad weather when work cannot be carried out.
Defect clauses
A defect clause should give you at least six months to raise issues after the work has been signed off by both the builder and yourself. Defects might be a leaking roof or loose guttering, but they could be structural. Without this clause, many builders will not return to your job and you will be left seeking a contractor to fix up the work. As part of the contract, you should be able to hold back 5 per cent of the value of the work to fund any problems that may arise. This should be paid to the builder at the expiry of the defect clause.
Insurance is vital
Legally, any work valued at more than $20,000 requires the builder to take out Home Warranty insurance, which will cover you and the builder for any corrective work for up to five years. Make sure you read the documentation and check the builder’s coverage is at least the minimum of $340,000 or the value of your work.