The HIA often receive distressing calls from members who have become involved in detailed, expensive and emotional disputes after doing work with friends, family or the classic “a friend of a friend”.
When requesting or performing work for friends or family, it is important that homeowners, builders and subcontractors adopt the same level of contract administration, attention to detail and compliance that you would in any other circumstances. Otherwise, it is likely the project will run into issues and lead to costly and stressful situations. A level of familiarity between the parties can sometimes breed a lack of communication or a hesitation to set expectations about the work to be carried out.
Below are some tips HIA provides industry to ensure that if you are working with family or friends, the project runs smoothing and you are still on good terms at the end of the build!
- Use a compliant residential building contract: tradesman will often say that they did not use a contract for a family member’s build. This is often because they don’t want to make it “too formal” or they are certain that they can negotiate their way out of any disputes or concerns.
- Do variations correctly: changes to a family’s building works can often be done through informal or quick conversations or text messages. However, like any client, you must get them to sign off on a variation before commencing any of the altered works.
- Excluding works: like any owner, your friend or family member may want to do some of the works themselves, like their own landscaping or have another builder come in to do the pool. Any works that you will not be doing must be listed in the Excluded Items section of the contract. Otherwise, you run the risk of being held responsible for the works which can lead to disputes if these works fail.
- Never lend your licence: friends may ask to ‘borrow your licence’, representing themselves as the builder using your licence number, doing the work and organising the trades themselves. This is known as licence lending, it is incredibly risky and never recommended. From an outsiders perspective your licence is the one that has warranted or essentially performed the work and therefore you will be the one held liable if things go wrong.
- Never have a separate ‘contract for the bank’ that does not reflect your work: the contract that you sign with the client (whether it is your friend, family member or a stranger!) should accurately reflect the value and scope of the works being done. Providing a contract to the bank that misrepresents the works is known as mortgage fraud. While doing works with family and friends can be a fun and collaborative process, it is important to put the appropriate paperwork, contracts and procedures in place. By taking the same level of care that you would with any other project, parties can ensure that both their relationships and their hip pocket are still in one piece at the end of the job.
If you require assistance with this matter or would like additional information HIA members should contact the HIA Workplace Services team on 1300 650 620
Craig Jennion
HIA Executive Director – Hunter