The Essential Checklist for Building a New Home
So you want to build your own home? This is quite a complex task so one must be prepared. If you do decide to go forward, it might be best to read this guide to get a jump-start on what you should know. Here is the checklist to help you through.
- What can you afford to build?
- Choosing the land
- Getting ready to build
- Checking your plans
- Before you sign the building contract
- Before construction starts
- Once construction starts
- Moving in
- Furnishing your new home
- Important information you need to know about being an owner-builder
Building your new home is very exciting and there is much to think about.
Two golden rules before starting
- Do not sign anything with your builder until you have read all the small print. If there is anything that you do not understand, ask for advice from an independent builder, consultant, or obtain legal advice. Remember once you have signed a building contract you cannot normally back out if you change your mind. There is no 'cooling off' period.
- Ensure that everything important is confirmed in writing and keep a copy.
What can you afford to build?
Have you worked out your total budget including the cost of the land, land valuation, legal fees, duty, settlement agents' fees, rates and taxes (including land tax), site works, building costs, furnishing costs, landscaping and moving expenses?
Have you checked whether you will qualify for finance? Many banks and building societies have brochures on the different types of home loans available. You may wish to consider seeking the services of a mortgage broker or an independent financial adviser.
Is the finance package the most suitable for your needs? Shop around to ensure you get the best package, and seek independent advice if you think you need it.
Choosing the land
- Does the locality you have chosen meet the needs of your family? Find out about bus and train services, schools, play groups, shops, doctors, hospitals, dentists, places of worship, etc. Make certain that any proposed improvements for the area are likely to eventuate.
- Have you checked with the developer whether the land has any encumbrances, easements, proposed resumptions or restrictive covenants? These appear on the certificate of title. Is there likely to be any delay in subdivision approvals that might delay getting a building approval?
- Have you checked with the local government whether there are any future subdivisions, road changes, or any special building conditions or covenants that apply?
- If the block has a strata title, have you checked with the local government whether there are any special building requirements?
- Have you checked with the local government how much the tax rates are?
- Have you checked with your builder about the block size, shape and aspect to make sure it will accommodate your planned home? Consider the desired sun orientation. Does it suit an energy efficient design? Are frontages and clearances sufficient to meet local government planning requirements? Do you need retaining walls?
- Have you checked the availability of gas, water, sewerage and electricity? In new areas, check whether sewerage has been connected to a main or whether it is collected in a tank near the block, and emptied by truck at intervals. Check that gas pressures in the area meet your needs.
- Have you checked whether the orientation and access to services provided will deliver the level of energy and water efficiency that you require
- If there is a dividing fence on the property, check that it is on the boundary.
- Are you fully aware of the extent of site works that will be required for work such as tree removal, leveling, retaining walls, removal of clay or rocks, extra drainage etc? The cost of site works may be affected by the house design or soil type and it might be advisable to obtain a soil report.
- Are you sure the land parcel described on the purchase contract is the one you viewed?
- Have you checked whether your local government helps new home buyers in the area?
Getting ready to build
- Have you developed a simple filing system to keep a proper track of events? There is always a lot of paperwork involved in building a home, particularly with house and land packages.
- Have you visited a few display homes by project builders and also individual homes built by non-project builders so that you really understand the different options? Seek clarification about special offers.
- Are you happy with the type and dimensions of the materials to be used, for example, the thickness of the floor slab, type of bricks to the inside walls, roof framing, roof tiles, wall plaster or plasterboard finish? Ask an independent expert for an opinion.
- If you are buying a display home, have you checked that the model you are buying includes all the features you are expecting?
Remember to check the contract and specifications.
Do you fully understand what is and what is not included in the price? Get everything in writing, including these types of features:
- Paths and driveways
- Carport floor
- Garage doors
- Retaining walls
- Hot water service
- Gas supply
- Light fittings
- Location of power points
- Television antenna and outlet
- Garden taps
- Window locks
- Fly screens
- Roof insulation
- Vanity cupboards
- Shelving to cupboards and robes
- Wall painting
- Floor tiling (including the laundry)
- Are all of your chosen materials readily available? Find out when orders for ceramic tiles are placed and whether the retailer sets them aside for you.
- If the plans were prepared to your instructions, are you certain that no copyright laws have been infringed by you having used any part of someone else´s design?
- Have you checked out other work your builder has done? Ask previous customers if they were happy with both the service received and also the quality of their new home.
- Is the person who is to do the building work registered? To check if your builder is registered go to a Building Commission website and search the register of builders (empreiteiros).
- If owner-building have you obtained an owner-builder approval?
- Have you considered your options for termite prevention treatment?
- Has your builder asked you to sign a document yet or pay any deposit? First, check the document very carefully. Do not accept any statement by the salesperson that you can change your mind later without penalty, unless this is clearly written on the document and is signed by the salesperson.
Checking your plans
o Have you checked all the plans and specifications thoroughly? Make sure you fully understand the plans and all of the symbols used. If plans are drawn up in advance of a building contract, check with a building surveyor or the local government that they will be approved without major amendments.
o If you selected from a display home, have you taken the plans along and checked the features and the measurements of rooms and fixtures installed?
o Have any changes or any extras that may have been offered or agreed to by your builder's sales consultant been included on the plans or in the specifications?
o Have all of your selected materials and design changes been included in the drawings and/or specifications? Variations made after the contract is signed may incur an extra fee. Are the locations of power points, taps, light fittings, gas and TV fittings exactly as you require?
o Have you checked the total cost of any changes you have made to the original plans?
o Are you still certain that you are able to meet the total financial commitment?
Before you sign the building contract
Have you read, checked and understood all of the contract documents thoroughly? Insist on the use of one of the recognized form of building contract, such as those published by the Portuguese Housing Association. If you don't understand any part of the documents, ask questions and seek your own expert or legal advice. Make sure that you understand what your contractual obligations are, as well as your builder's. If you want anything changed, this is the time to do it.
Have you checked to ensure the contract is not 'Cost Plus'? If you are contemplating signing a 'Cost Plus' contract, you should be fully aware of the consequences. Check with an independent consultant or builder to explain it to you or seek your own legal advice regarding a cost plus contract.
Does the contract require the release of progress payments at various stages of construction and, if so, are the terms satisfactory to you and to your finance provider?
Do you intend carrying out any particular construction stage yourself? If so, have you checked the contract conditions in respect to:
- Time delays resulting from your involvement in construction;
- Effects on the overall warranty of the building; and
- Whether you need to obtain separate owner-builder approval for any of the work that you perform?
- Do you intend to provide any materials for inclusion in your home, such as spa, kitchen equipment or light fittings? If so, have you checked whether your builder's insurance covers the loss or theft of these materials from the site or damage after installation?
- Check that piping, cabling etc is of sufficient rating/capacity to run the appliances, as part of an integrated system, before the house is built.
- Have you checked the dates or time periods that the fixed contract time is scheduled to start and finish?
- Have you established what your rights and your builders' rights are if your builder should over-run the original contract construction time?
- Are there any allowances for 'Provisional Sums' and 'Prime Cost Sums' and, if so, do you understand the meanings of the terms? Do you know how the amounts that you will actually pay to your builder will be calculated? If you are uncertain, ask your builder or an independent consultant or builder to explain it to you.
- Has your builder included in the contract the price for fixing the items covered by 'Prime Cost Sums', not just for supplying them? For tiles and tiling, check how many square metres are included and ensure this is stated in the contract documents.
- Are you unhappy with anything that is included in the contract documents? If so, ask for changes to be made. Any changes must be in writing and signed by both parties.
- Are the contract documents fully completed? There should be no blank spaces and the contract should include everything that has been discussed.
- If you still have any questions about your rights and your obligations under this Act, seek your own independent legal advice before you sign the building contract or pay any deposit.
- Has your builder provided you with a copy of the Home Indemnity Insurance policy covering the proposed building work before you pay the deposit.
- What deposit have you been asked to pay? The maximum deposit is 6.5 per cent of the contract sum if the value of the home building contract is between $7,500 and $500,000.
- Has confirmation of Government or other financial assistance been received (if applicable)?
Before construction starts
- Has the contract been signed by both parties?
- Has your builder supplied you with a complete, signed set of the contract documents? The following should be provided to you as soon as possible after the contract has been signed:
- The contract together with a Schedule of Particulars or an Appendix;
- Complete set of plans;
- Written specification of workmanship and materials; and
- Certificate of home indemnity insurance.
- Have you provided proof of your ownership of the land to your builder?
- Has local government and Water Corporation approval been received by your builder?
- Has your builder advised if the work requires your neighbor's consent in circumstances where it may encroach or affect adjoining land?
- Has the developer's approval (if applicable), been received by your builder?
- Has confirmation of finance approval been received? Your builder may request a copy of the finance approval.
- Has your builder invited you to attend a 'pre-start' meeting? At that meeting you will be asked to make a number of important decisions about the types of materials and fittings and about colors. If you must make any last minute changes, make them now and not after construction starts unless the contract has been amended appropriately.
- Has your builder provided you with a copy of the 'Home Indemnity Insurance' certificate?
- Have you checked if your builder also has insurance for flood, fire and theft as well as 'Public Liability' insurance for injury to persons.
Once construction starts
- Have you been given the name and phone number of your contact person in your builder's office? If practical you should try to deal only with that person.
- Have you arranged to check the work on site regularly yourself? Regular visits to the site are essential but make sure you do not inconvenience any of the tradespeople. Take a spirit level and a tape measure with you and make certain your builder is working to the most up-to-date plans. Check that the colors of materials used are as selected, including bricks and paving. If regular visits are not possible or if you are not certain what you should be checking, it may be worthwhile for you to employ an independent consultant or builder.
- Have you received a claim from your builder for a progress payment? Carefully check that the work is properly completed up to the appropriate stage.
- Are you aware that, for your protection, you should deal only with your builder and builder's supervisor on-site and not the tradespeople on-site?
- Have you arranged to take photographs of the work at regular intervals, particularly any part of the work that may be of concern to you?
- Have you purchased a diary to record all of the day-to-day happenings, including discussions with your builder? You should record the time and date of all telephone conversations as well as the name of the person you spoke to and what was discussed. Discuss with your builder any queries or problems you may have about delays, quality of workmanship, or any other issues as soon as they arise. For anything other than a very minor problem, consider confirming your views in writing to your builder as this may assist you with clarifying the issue at a later time.
- Has your builder advised you that the home has reached "practical completion"? Check every aspect to ensure you are satisfied and the home is habitable. You can then hand over the final payment (even if there are a few minor outstanding items, but make certain you itemize them in writing to your builder).
Remember that you have made a financial commitment to your builder to pay in accordance with the conditions of the contract prior to obtaining your house keys. Note that your builder has a legal responsibility to ensure that the building work is carried out in a proper and proficient manner.
The builder is liable to make good, without additional cost, defects in the building work notified in writing within 4 months from practical completion.
The "Gabinete do Munícipe" is able to assist with disputes regarding building services and home building work contracts. Building services complaints need to be made within 6 years from practical completion. In most cases home building work contract complaints can be lodged up to 3 years from when the complaint arose.
Have you remembered to:
- Arrange connection of your telephone (you can organize for cabling to be carried out during construction), gas and electricity;
- Advise the water company;
- Advise your local government;
- Notify the post office and have your mail redirected;
- Get the address on your vehicle and drivers licenses changed;
- Arrange for house and contents insurance;
- Notify the electoral office; and
- Notify your bank or building society, employer, Medicare, insurance companies, solicitor, accountant, professional associations, clubs, schools, library.
Furnishings for your new home
- Have you checked that all furniture and appliances you intend to buy will fit properly into your new home and will pass through doorways and passages?
- Have you checked that the size and color of everything is right, using a tape measure and colour swatches of fabric?
- Have you checked the workmanship on all furniture, for example strong joints, smooth opening drawers and doors, etc?
- Have you checked the availability of spare parts for appliances and considered ease of cleaning and maintenance?
- Have you considered the following when buying carpets or vinyl:
- Shop around to compare prices and quality;
- Obtain at least two itemized and signed quotes;
- Check that the price includes laying, door strips, etc;
- Check the deposit required;
- Determine the type of underlay (if any);
- Determine the position of joins;
- Obtain the name of the salesperson with whom you are dealing;
- Re-check all measurements (your own and the store's); and
- heck that concrete floors are dry enough to lay the coverings.
- If you intend to hire trades people to do associated home building work such as laying wooden flooring or installing a swimming pool, make sure they have proven projects to show you.
Important information you need to know about being an owner-builder.
Before deciding to undertake building work yourself (instead of employing a registered builder), carefully consider all of the possible implications in becoming an owner-builder.
Owner-builder approval from the local municipality is required before applying to the local government for a building permit.
Owner-builder requirements are extensive and include displaying a sign during construction and ensuring all building work complies with building standards as well as safety laws and regulations.
Owner-builders are restricted from building again as an owner-builder for a period of six years, though, this depends are where you are located. In certain circumstances an exemption may be granted where the owner-builder can demonstrate how an unforeseeable change in their circumstances has occurred and demonstrate hardship will occur if an exemption is not granted.
Owner-builders have legal obligations to take out a home indemnity insurance policy before entering into a contract to sell their property to cover the prospective purchaser for any completion or rectification of building work where the builder dies, disappears or becomes insolvent.
The home indemnity insurance policy must cover a five-seven year period from the date of issue of the building permit.
Owner-builders should be aware that they may be prosecuted under the Act should they fail to meet any of the above requirements.
Despite the best intentions, there are times when disputes or complaints may arise over building standards, workmanship, building contracts, dividing fences and building work that may affect other land such as a neighbor's property.
At all times you should try to resolve any problems or disputes with your builder in the first instance. Document what you have done to try to resolve matters and keep copies of all correspondence and if you agree on things via the Phone, make sure you follow up with a email, which will help prove what was agreed as it will be in writing.
Contact us here if you want to build your dream home. We can help.