Thinking of building a new home on your farm?

As your farming business grows and you need extra accommodation on your property for additional staff, a manager or a sharemilker, you may consider building a new home on your property.

While building a new home can be an exciting time, it may also become stressful as you encounter fishhooks in the contract with your builder.  In order to reduce the risks and minimise issues along the way, we recommend that you refer the proposed building contract to us for consideration, prior to signing.

Just a few examples of matters that we can consider on your behalf are:

• Timing of deposits and payments.  Many contracts provide for payments to be made, regardless of the stage of construction.  We can check this for you and ensure that payments are only made when certain stages are complete and that the final payment is made only when the code of compliance is issued.
• What happens if your builder becomes bankrupt or is liquidated before completion of the construction.
• Your liability for additional expenses or claims.  We can check that you will not be liable for additional costs if the builder is negligent.
• Who bears the costs of building consents and code of compliance certificates and who is responsible for liaising with the council on obtaining the necessary consents.  You don’t want to have to deal with council building inspectors on matters of construction. This should be left to the builder!
• Insurances.  It needs to be clear who is responsible for public liability and construction insurance.
• What happens if you need to make variations to the specifications during the construction.
• The terms and limitations of your builder’s guarantee.
• Length of “defect period”.  Most contracts specify a timeframe where you can request that defects be rectified.  Sometimes the length of this period would not be sufficient for you to discover certain defects.
• What happens if you fail to make a payment on time or default on your obligations.
• Indemnity provisions for you if accidents occur on your land during construction.
• The necessity for personal guarantees.  If your company is the landowner, the building company may insist on personal guarantees, but it is always best to avoid giving guarantees if possible.
• Completion dates and timeframes, and when you get to move in!

This list above is by no means all you need to watch out for, so let us take away the guesswork and minimise the potential issues by checking your building contract before you sign.

We are able to review the contract for you, provide recommendations and even liaise with your builder on necessary changes or additions.

Let’s work together on putting your plan for a new home into action, without any unexpected problems along the way.

Written by Elise Hayes