So today we have I'd say a very good friend of someone that

I've known for 20 years now.

playing footy as a skinny 19-year-old.

Now I'm a fat 36-year-old.

So say that You said it before on air.

That's how you described.

It's outrageous me to Hamish.

But why I wanted to get Dan on today's this huge changes to the legislation in

Victoria around building, um, from owner protection to builder protection, to

like, it's really, everything's changed.

Don't think there's any builder protection just, uh, between us really.

Yeah.

So this is what I wanna understand because I think it's quite scary and I

understand what they're trying to do.

So from my opinion, it seems they're trying to give consumers

confidence back into building.

Um, but also understand on the flip side that yeah, it might not benefit us, but

it, I think the way Hamish and I build, it's probably not gonna affect us as much.

I think the trickle down effect is that we're gonna get impacted.

I mean, I'm, I'm just getting across all these new changes as, as we speak.

I mean, I know we've got a group chat at the moment where you are chatting

about the progress claim changes, and I'm still trying to get my head

around that because how can we run our projects if there's no method B?

Yeah.

Yeah.

Well look, that's, so I think, um, just so we don't get, you know, too ahead of

ourselves and excited, the, the changes around using method B and progress

payments have actually not been won.

They haven't been enacted yet.

Right.

Okay.

So they're just, they're actually before parliament at the moment,

and they actually haven't come up with the mechanism of how they

are going to do progress payments.

Yeah.

What, what the theory is, is they want to use.

Modern methods of construction.

That's kind of the, the oversight on, on the overview, I should

say, on how they want to, look at doing new progress payments.

What the way progress payments will be done will eventually be done by way

of regulation, currently regulation two of the, the old domestic Building

Contracts Act allowed for method B.

I would suspect that you're probably still gonna be able to use method B, but

there's gonna be more ways of doing it.

So there's probably, so in terms of protection for builders, it's more like

opening up opportunities for builders.

Um, ' cause

they're also talking about increasing the amount you can do for a deposit as well.

Yeah.

Yep.

So I mean, the current domestic Building Contracts Act.

Was enacted in 1995.

Great.

Yeah.

Great.

Yeah, when I was just a youngster last time, car won a premiership.

Yeah.

That's how long ago it was.

And, and like Carlton, it's extremely outdated with some of the things

that, that, that it prohibits.

Um, and allow, so deposits, for example, 5%, like you can't even pay for insurance.

Barely.

Yeah.

Yeah.

And once, once they start doing the big thing for builders and consumers

is gonna be the new insurance regime.

Yes.

Okay.

And.

The, that's gonna be passed down from, and even like developer bonds, right.

That's gonna be passed down by the developer to the builder that cost.

So it's

2%. So developer bonds is an extra 2% that the developer must hold for a year.

A year, yeah.

And essentially to pay for fixes.

Yeah.

And they're never gonna get that back.

No.

No.

There's no chance.

No.

Because like the owners and the owners corporation is, most, most developments

are gonna be more than one lot.

Yeah.

Which means there's common property, which means there's owners corps are

just gonna hold them as almost like a replacement for, for the maintenance fund.

I'm, I'm, I'm not a smart man.

But aren't developers just gonna increase their prices by percent?

Exactly.

That's what I mean.

So they're just gonna, it's just gonna be an increase.

Increase the price.

It is gonna increase every, everything.

And it's gonna be, Hey builder, you're gonna have to get this insurance

to cover me for this developer bond because I can't afford it.

And, um, just

put it on the bill and we'll charge everyone

else.

Yeah.

Yeah.

So everyone, the consumer ends up paying, just noticed, is

that a whopper, your tattoo?

Because Oh, it's a burger.

It's a, it's a, it's a burger.

One, one of my nicknames that footage.

Yeah.

Whopper is Captain Whopper.

So, so my celebrating just,

just, just, uh, just to sidetrack, so my son Phoenix.

Yeah.

His nickname is Burger.

Oh, nice.

So love it.

That's why I've got a, I love it.

That's why I've got a burger on my forearm.

Yeah.

Sorry I took us off track.

Don't worry.

No, no, no.

We love it.

Do anyway.

Love realize I should have eaten.

We love the side four,

not four coffees.

hang on, just, just to go back a sec.

That's for developers, not for builders.

Yeah.

But they'll, they'll eventually just say to the, to the builder,

like, you need to build this cost.

Into your contract and then pass that on the, to the owner.

Yeah, so there's insurance you can take out.

So you can

either hold 2% in the cash deposit.

Yeah.

Yeah.

At the end of the build it's 2% of the contract price.

Or you can then take that two, or you can have an insurance, which is

gonna be like hundreds of thousands of dollars you can take out.

Yep.

Because reality is no, they're gonna use that funds, they'd be

the rent center, like they're just gonna find things to fix.

Yeah.

Okay.

Which is, I understand why they're doing it because at the moment the issue

we have is that just, and I shouldn't say just developers, but people just

build and there's no, you would know better, they just send themselves, they

Phoenix the company and, yeah.

Yeah.

Correct.

I mean, developers are normally like $2 companies.

And even though it might like say, uh, I'll use, I won't use their names

because I don't wanna defame anyone, but let's say it's, um, Sancton Homes.

Sus Piman, yeah.

Instead of someone else, they might just have, um, that company or, you

know, call it Piman Homes might have.

Like Pine and home number one.

And then they'll just, you know, once that company doesn't exist

anymore, they'll, it's gone.

Just the next project will be done in a different development company name and

a different development company name.

Oh.

So they've worked out a system and this is what they're stopping.

Like one of the big kind of developers at the moment is, I think they're on

there like fifth or sixth company.

That's the development company builders is much harder to do.

Yeah.

Because now that the new building and plumbing commission and the

old VBA through its insurance arm will just refuse you insurance.

If Matt Carland has been a director, which he hasn't by the

way of a, um, insolvent entity.

Yep.

They will just not insure Matt Carland anymore.

Um, so he'll, you'll have to find someone to to go in the director.

Okay.

Yeah.

And that's hard to do 'cause you've gotta be registered,

you've gotta have asset base.

So they're trying.

Look, basically the, the summary of all of this is in the, the genesis of it

is one, the outdated domestic building contracts act two, the collapse of a

couple of major builders like Port Davis.

Um, there's a couple other kind of smaller, there's one

in New South Wales, so this is

just practically, but this is only for Victoria though This, the,

this, this is only in Victoria, but this problem exists Australia wide.

Yeah.

Okay.

Yeah.

So we're the test pilot really for everyone else.

We are a little bit alone.

New South Wales is way ahead of us.

Okay.

So they've had this type of kind of regime.

They've got a different regime to us in terms of insurance and deposit bonds and,

um, the, it's called decennial insurance, which is essentially defect based

insurance instead of, oh, you've gotta go insolvent first before we pay out.

Because the issue I have with insurance at the moment is we, like,

we bank the domestic body insurance.

Yeah.

We pay.

The same.

We've been on the same limit as pre COVID yet prices have gone up.

Yeah.

Twofold.

But they haven't increased our limits or in our job capacity.

Yeah.

Um, and the amount that they're charging now is, I think, nearly

three x of what it was pre COVID.

Yeah.

What, what I probably want to, I'm more interested in Yeah.

Like a, a lot of the stuff that we're talking about now is probably

not as relevant to most of our listeners when we start talking about

developers and all that kind of stuff.

Yep.

Well, what, what are some, what are some of the major changes that, that

we are gonna be seeing that are gonna impact our US resi builders that are

doing four to eight homes a year?

Yeah.

Um, so I'll just say almost all apart from, I mean, Matt mentioned deposit,

um, bonds for developers, but other than that one, which even if you're doing a

two lot subdivision, that that can apply.

Yeah.

Okay.

Oh, wow.

Um, you, you are every single piece of this new piece of legislation,

and there was another one earlier last year that's already been

introduced that introduced the new.

Building and plumbing commission.

The new insurance regime, the new insurance regime covers every

builder in Victoria under all jobs.

Okay.

So including commercial inclu.

So no, not just re just re rezi.

Yeah.

With commercials always kind of been its own beast.

Yeah.

And it's not, 'cause it's not a consumer, you know, you're dealing with probably

a high end kind of client when you've got mom and dad homeowners building

this act and this amendment covers that.

So you've got a new type of insurance that is gonna start pro most, almost

certainly from the 1st of July next year.

Um, that's gonna be a, as distinct from what it is now, which is you

have to basically kill your builder by way of insolvency, or actually he

dies, um, to get, to make a claim.

this is gonna be first resort.

So Matt is gonna get, not Matt, because he, you can use me as an

example, doesn't do defective work.

Um, or Hamish, you just service that.

You know, you, you might have got, you might have been to the, this new

part of, um, the plumbing commission.

Building plumbing commission is essentially what used

to be the old D-B-D-R-V.

You might get a rectification order or a rectification notice if you

don't answer that within 14 days, that triggers an insurance policy.

So is that answering as like, fixing or be like, oh no, we're onto to

it, but it's gonna take us 10 days.

So Yeah.

A as the bill, we're not sure how it's gonna work.

Yeah.

Because it hasn't even been tested, been tested yet.

Yeah.

Okay.

But the theory behind it is get a rectification notice,

have essentially fought.

You've gotta say, Hey, I dispute this, or, and if you dispute

it, you've gotta go to appeal.

Okay.

Or you've gotta fix the work.

Or you need to say, I need more time, which is probably what you are saying,

but is does that then hold my license on pause doing my other projects?

That's not really, so not, it's

not a licensing thing.

This is just insurance.

Okay.

So they they

But they're under one banner though.

Now They can, yeah, they are.

So,

but you are right to, to an extent that if you refuse to do it and then you,

the insurance pays out, they're gonna, they're gonna strip you of your license.

They're gonna strip you of insurance Yeah.

And strips you of the ability to trade.

let's just wind it back just, just for a minute.

Yeah.

And just talk about how someone makes a claim now.

Yeah.

And then we can talk about how, and then it probably makes more sense

what we're talking about, you know, in the last couple of minutes.

Yeah.

So what, what is the, what is the mechanism to make a claim to, to

make a claim against your home warranty insurance Now What, what,

what conditions need to exist?

Builder has to have died.

Mm-hmm.

Insolvent.

Now insolvent means any form of external administration.

So.

For Hamish and Co proprietary Limited, that would have to be you being wound

up, which is actually an extreme measure.

Yeah.

Okay.

It doesn't happen very often and you get a lot of chances to defend that,

um, disappears, which is really not known and, and it's never been tested.

Yeah.

And we're not in Mexico.

No.

Exactly.

And the third, uh, fourth step, which only came in in 2019, I think 2018,

is if a court orders you to pay money.

Right.

And that takes an owner going all the way, getting judgment and you not paying.

Okay.

So those steps are actually quite rare.

Yeah.

Okay.

Building dying, building, becoming insolvent.

Okay.

Obviously, Porter Davis.

Yes.

disappears.

Doesn't exist.

Never, never been tested.

Yeah.

Court orders happen, but I'll just tell you, I, I do a hundred cases, you know,

at any one time we would get court orders in one to two of those matters, max.

Interest.

Interesting.

'cause everything settles and everything resolved before a court

order because mainly the builder doesn't want an insurance claim.

Yeah.

So, so, so it's, so now it's called last resort for a reason.

Yeah.

It just never gets paid out.

Now we're looking down the barrel of a, of a court order straight up.

Yeah.

It's more a rectification order by the building and plumbing commission.

Not a court which can be done with someone coming out and going, oh, the,

you know, the cornice is like crooked or cracked or there's a missing piece

of downpipe rectification order.

They can just hand it to you or issue it to you.

Yeah.

14 days Don't answer it.

Insurance claim.

So it's, it's first resort.

You gotta be on your toes.

One don't have defective work, obviously.

Yeah.

Fix your defect straight away.

Or if you don't agree, you have to appear.

So I think it actually look, not that I'm promoting legal dis disputation,

but it's actually, it's gonna cause more disputes 'cause builders are

gonna have to dispute defects.

Yeah.

So, so

what happens if our client a is like that is out of, that's a

defect and we are gonna fight that.

Yeah.

And they get found that I was completely within the right, can

I now counter sue and get my money back for all the costs against them?

Probably not, is the short answer.

Yeah.

Which is, yeah.

The, the way that the system works, it's set up and that's why I just, not

to be the bearer of bad news, but all of these acts are consumer friendly.

Okay.

The consumers pretty much never.

So in, in the situation when you're talking about a rectification

order, that rectification order is made by the building and plumbing

commission, not by the owner.

Yeah.

Okay.

So they'll, they'll investigate it first, so they have to

look at it and find that it's a defect.

Yeah.

Yeah.

Okay.

So if they're wrong, you could potentially get a cost order against them.

Which I, I'll just say I think that that should happen.

Yeah.

And so with some of 'em will challenge that.

Yeah.

So with, with the vba, with the old VBA slash new plumbing commission, if they

make determinations on things like, protection works and all your disciplinary

stuff and they lose, they do pay costs.

But it, you know, as I say, those things are quite rare.

So, but this is going back, we actually used to be down this like owner

first years and years ago, didn't we?

Did, yeah.

Back when I first started pre I think it was 2000, sorry, 19.

93 I think it was.

Um, actually no, it's up until about 2000.

Geez, you are old.

Was Yeah, there was something called the housing guarantee fund.

Yeah.

And it basically allowed you as a homeowner to say, Hey, I think I've

got a defect with my property housing guarantee fund would come out.

They used to be essentially what?

These are the VMIA now, they'd go, yep.

That's worth, you know.

30,000 and they'd basically pay out.

Um, and there was, the system was set up that the, the cost of obtaining

permits and all those sort of things would be, would go into this fund that

funded the housing guarantee fund.

And look, the system was pretty good.

It was just very limited.

They had a maximum payout of 40,000, which now as we know,

that doesn't cover Jack, you know?

Yeah.

Cover Jack.

I'm trying,

I'm trying to, I'm sitting here trying to like understand

the logic behind this change.

Mm-hmm.

It's 'cause the government fucked up and they need to get

confidence back into housing.

'cause they need to be what?

Build 1.2 million homes.

It's the reality.

It's all about trying to get, because back, because don't you think this is

putting like in a, an incredible amount of pressure on builders trying to,

who are trying to do the right thing?

Like it's just putting

Correct.

But I guess what Matt said, valid, which is, you know, there is a bit of a checks

and balances thing, which is you won't have to have an insurance claim if.

Do the right thing.

You do the right thing, you don't build defective work.

Okay.

And if you think they're wrong about it, well you've got your,

you've got your chance to appeal it.

Yeah.

The, the problem with the old system was builders would be let go too long.

Shit builders.

Right?

Like Porter Davis could take a whole lot of insurance and rip people off and you

get, you know, I get clients every day and a lot of 'em are new Australians and they

just pay and pay and pay and pay and pay.

And then the builder goes under and they're like, oh my God.

And it's not covered by insurance.

Yeah.

So it's people

that say, oh yeah, I've paid all my, the whole bill costs than the frame costs.

I'm like,

hear, and sometimes culturally, right, I'll just say this is, it's just he asked

me for money and I paid him and they didn't know any different, they don't

know the consumer law, you know, they don't, they can't afford legal advice.

So this is to basically kind of, I think.

You know, put the handbrake on, on on bad builders.

I'll say, and like I'll just say, if you're a good builder, like

you two, it shouldn't, would be, it shouldn't bother us at all.

It's, it's not a concern.

So that's what I was about to say.

I was, I was about to actually ask that up.

Like is there a silver lining here?

Like is there a silver-lining?

Lining?

Lining is,

is, it does give, like, I think it gives some consumer confidence.

Yep.

The only thing that I have a real concern is, is who are the people

that are coming out and inspecting?

'cause I've seen some of the people from the D-B-D-R-V,

they're really not qualified Yeah.

To give the opinions or they'll, they'll just kind of do generic, uh, well,

um, you know, and it might be that by, when they do an inspection, you

are kind of mid stage and it's like, I haven't actually finished like, it looks

like that because I haven't finished.

I had, I had one that, where they came during a frame once Yeah.

To the VBA and they're like, you frame, no, we're gonna

have to write all these things.

It's not to stand.

I'm like, we're still framing.

Yeah.

We haven't finished.

They failed the frame before and then the building inspector

got a notice and he's like.

They haven't finished it.

Yeah.

Why did the VVA come out?

Because they do the random audits.

Ah, they can do audits.

Yeah.

Okay.

Sure, sure.

So they came out for a random audit and then said the frame was defective, but

they was literally standing walls up.

It's not finished.

It's, yeah.

They're not meant to be lying on the ground.

They're not meant to.

They're meant, they're meant to be standing hard to

plaster when they're on.

Yeah.

Okay.

So, so, okay.

So, so people, so I would say, I would hope that most of our listeners are

builders wanting to do the right thing.

Yeah.

So if, if we continue down the track of building better, building

consciously, consciously, you know, trying to better ourselves.

Yeah.

Managing mold, condensation, all that kind of stuff, then allies may not change.

They look, I think the good builders this is to try and weed out the shit builders.

Okay.

Like, catch 'em early.

Yep.

Right.

Building, building commissions most of the time, you know, you know, I

don't wanna use Porter Davis as a an example, but, well, we can 'cause

they, because they may as well.

'cause they're insolvent.

They're insolvent.

Yep.

The problem with those ones is it all happened too late.

Okay.

It's the horse bolted by the time the commission gets involved, the

lawyers get involved and the, you know, the, the, the people come

and try and slap you on the wrist.

You know, the owners, you know, like halfway through, you know, lockup stage

and they've paid a hundred percent of the claim and it's just a disaster.

And that costs us as taxpayers 'cause they're like a lot of that

we have to kind of end up funding.

Yeah.

Like, 'cause the VMIA, we essentially fund that and there's essentially kind of.

the checks and balances are happening too late.

Yeah.

Right.

And also we know that surveyors don't always do their job properly and

aren't really, 'cause I think a lot of consumers think, oh, that's right.

I've got the building surveyor.

The building surveyor doesn't come on site from frame to finish

till the end actually, actually, so much shit can go wrong.

I actually raised a question to our insurance company.

It's like, can we get our premiums reduced if we do it?

A pre plaster and a waterproof inspect.

She goes, that would make sense.

But they've declined.

They don't do that.

They declined that as an option.

No, they actually had the option to take that in and he's

like, nah, nah, we're doing it.

So the other thing I read as well is with this insurance, what they'll do as with

nine years, 'cause of 10 year insurance, it's just something we should touch on.

'cause people think that you taught me something last time I was in here that

our insurance is actually 10 years.

Yeah, no, it's not

statutory warranty.

Yeah, but that's everything though.

Correct?

It's even

non-structural.

Yeah.

Correct.

So non-structural is still 10 years.

Oh, okay.

So

what it is, is this is just this misconception and you, you

are not, you know, we're, we're kind of chuckling about it.

It is completely misunderstood by builders, okay?

That you are not liable for anything after that six year period.

Right.

The insurance lasts for six years.

Okay.

But I'll just say if something happens within that six years and

the owner notifies the insurer within the six years, you are liable

for a lot longer than six years.

Okay.

I put that to one side,

right.

Separately to that, you are liable to that owner.

Nothing to do with insurance for 10 years from the occupancy permit.

It's just that the owner, after this, between six and 10, there's no

insurance there for them to claim on.

Okay.

So they're going straight to you and they're going, Hey, come and

fix my, whatever it is right now.

The difference between structural and non-structural is the insurer can deny

non-structural defects after two years.

Right.

But I would just say that almost everything now, like

waterproofing becomes structural.

Yeah.

You don't do waterproofing.

It undermines your structure.

Mm-hmm.

You know, you, you, you, you can always link something back to structure.

Your frame gets wet and, and then it's non, it becomes like balconies.

No.

Are they not structural?

They're not structural.

They're gonna kill someone.

Yeah.

You know what I mean?

Yeah.

Uh, so ultimately.

if you are a good, to really kind of answer your question, Hamish, is

that if you're a good builder, again, you're doing good due diligence on

your subbies and you, you're doing quality assurance and, and that sort of

thing, this won't be a problem for you.

In fact, you'll become the leader in the industry.

Yeah.

Because you'll have high quality work and you won't have a problem.

That's not to say things can't go wrong, but when they go

wrong, you'll deal with them.

You'll deal with them in a way that needs to be Yeah.

Kind of methodical and not just ignoring the owners.

Because a lot of the time, you know, if you're a builder right now, right in this

current regime, you can get away with a lot by doing nothing because the owners

just lose confidence and they've gotta go to vcat and that takes two to three years.

But that's what this bill's changing.

That's changing that.

Yep.

Yeah.

Okay.

Okay.

So the

other thing they're

doing as well, I was reading, so a, after your.

At nine years, you'll get a, the owner will get a letter from the cancel

saying that, Hey, you've got one more year on your structural Right.

And then at 12, at 10 years they'll get a letter saying, no,

your now structure is finished.

Yeah.

So

it's actually, so the 10 years is actually all defects.

Yeah.

Okay.

I actually wasn't aware of that, but that, that's to me is just silly.

That's telling people to, like, they claim they won't have had a problem.

The

thing

is you probably know if you've got a problem, you know?

Yeah.

you could be a good builder.

Yeah.

And I mean, I like to think that we're developing these relationships

with our clients even before we've started swinging a hammer on site.

Yeah.

And you know, we're, I say that we're testing this relationship, you

know, before we actually get to site.

'cause now's, now's the time to do it.

We don't wanna be testing that when we get to site.

People's circumstances can change over, you know, within that 10 years time.

And you might have this amazing relationship.

With the client.

Yep.

Through Precon, through the build, and for eight years of them living in that home.

And then something might change.

What's stopping them at that point there becoming like a pain in the ass.

Like if they,

and like, well they might sell the house and someone buys it

or, or someone else buys it.

Like, I'm not saying that the amount of

times that happens and just so our, you know, the viewers and listeners

know that, that actually that's probably the, the, the bigger thing.

Whereas, 'cause you might've built for, you know, Mary Smith

and had a great relationship.

She sold to bugger lugs.

Yeah.

He might use the property differently.

You know, he might actually, I've had ones where they haven't used the

downstairs chair, step shower maybe, and then they've used it and gone, oh crap.

Like we've actually, the waterproofing failed or we actually

never, you know, connected it properly or as a break in the.

In the sewer or something, right?

Yeah.

And that issue is you just have to deal, and this is like a really, really

simplistic answer, but every problem should be just dealt with methodically.

Yeah.

As if it's the first time you've ever Yeah.

Dealt with it.

is it a genuine building defect or is it an occupational issue?

Okay.

Is it the way they're using

it?

And who's determining that?

So ultimately the, the ultimate decider of that is the, is a court.

Okay.

But if you want to get an opinion on whether who's right or wrong, you

should get an expert in that field.

Yeah.

Okay.

But who's an

expert?

A

builder.

So I personally don't think builders are great experts.

Okay.

They are on maybe things like framing and, yeah.

Yeah.

Maybe things like, but if it's, if it's like a plumbing

defect, get a plumbing expert.

Yeah.

Get someone that understands hydraulics.

Get someone that understands, you know, falls and Yeah.

And can do a,

so that's, that's probably some really good advice because I think, you

know, as builders, I'd say the good builders are real people pleasers.

Yeah.

Right.

So they're gonna, they're gonna go out and they're gonna like wax lyrical

about what the problem's gonna be.

Yeah.

So you are saying understand what the problem is.

Yeah.

And then immediately get the ex exploit expert in my is the same

as like a same with any medical issue.

Right.

You go and you get diagnosed.

Okay.

But if you are not a doctor, yeah, don't diagnose yourself.

Yeah.

Okay.

The world's changed hasn't it though?

Yeah.

That's what happens now.

I got my advice off TikTok and Yeah.

I must be sick.

Yeah, exactly.

And like, I mean, there's the TikTok inspectors who, like most

of them are not qualified, right?

So what you need to do is you go, actually, I can see a bit of movement.

Right?

A bit of like, yeah.

Stuff moves, but you shouldn't have, you know, cracks over two mills.

Yeah.

So if you've got a crack over two mills, you go, I need an

engineer, or I need a geotech.

Yeah.

Because I gotta work out what's going on with the soil.

Right?

Yeah.

What's happening with the foundation if it's a plumbing defect.

Yeah.

Right.

Get a plumber, get a camera down the pipe and see what the hell's going on.

Well,

yeah.

You made a comment to me when we caught up.

Was it maybe early this year where we were looking at, um, for the issue we had

was clients calling us back for defects.

It was their own fault.

Yeah.

And you just said, even if it's their own fault, go check it

out first.

Yeah.

Just go and check it and then at least you can say, well, you know, your

kid's shoving socks down the toilet, or whatever they're doing, you know,

or are, are you turning the fan on in your, um, correct.

In your, in your shower.

Yeah.

When you,

because if you're not, you're gonna have condensation and mold.

Yeah.

Right.

Yeah.

So maybe good gateway to mold then.

Yeah.

Because is this just about to make you of mold this topic about to

make you lawyers a lot of money?

It is.

Yeah.

Yeah.

We, we are lucky.

I'll just say.

Very lucky that we've had no rain.

Okay.

Because the way that if we had had Sydney's rain, there would be properties.

I mean, as you well know, most of the houses are built like a bloody tent.

So you've got holes and you've got shitty waterproofing and you've got,

you know, but at the moment we're not even seeing signs of that because

of the fact that we've really had no rain for, I don't know, like,

it feels like it's been a year.

So, so, so that means in Sydney, but if rain, if excessive rain and flooding,

cause mold, is that still in the builder?

Well, water should not get in a building that the fact is, is

that it will, but it shouldn't get into the point of causing mold.

Yeah.

And now there's a clause in the contracts that, in the NCC that says

something like, you know, only have 10% of mold and therefore it's defective.

Like re three of mold is more than 10%.

10% of what?

Who knows?

Yeah.

But that is scary because.

10% of an area.

Is that what you're Yeah, but they're trying, like there's,

from what I understand, it's court cases at the moment.

They're trying to determine what 10% of an area is, of a 50 cent coin.

Is it under a microscope?

Like what is that?

Yeah.

Um, it's been, I know there's, I've been told there's three court cases

right now about that, but it's scary because the way we build, we're safe.

Yeah.

Or mistakes.

It's, it's still, I mean,

it still makes you think though, like, you know, because mistakes can happen.

Yeah.

You know, like.

I mean, so timely.

We're doing this webinar tonight.

Water kills buildings like it does.

Yeah.

Hands like the biggest killer in a building is gonna be water.

And that can be coming from the inside or the outside.

Yeah.

So it's managing both.

Yeah.

And understanding how water moves through a building envelope is probably

something that is now becoming a thing and people are getting more

educated on it, which is really great.

But, um, I'm interested to see like the f the first court case that actually holds a

builder liable for having mold in a home, I think is gonna be a pretty scary there.

There

has been some, which I can, I can, I'll shoot through.

Yeah.

normally it's, you know, in connection with maybe a, a, a

separate quite significant defect.

Yeah.

Like about like it's normally waterproofing on a balcony.

Yeah.

Okay.

Or so why would in summary, don't build balconys?

Yeah.

But like with all these changes, why didn't they do waterproofing inspections?

It would've solved so much.

I know, like, honestly, there's probably, I would've thought.

I think what it is at the moment, they're finding it extremely difficult

to get people to be building surveyors because building surveyors, because

the builders are so hard to get right.

'cause all they do is, you know, they'll just, as we were talking about

before, they'll tank their company and yeah, they might pay out on one

policy, but really they, like the builder is a pretty bad target, right?

'cause they're, they're worth nothing.

And the insurance is so hard to get to 'cause you've gotta make

them insolvent or take it all away.

Building surveyors the complete opposite.

Easy to get to.

They're a target.

Right?

Okay.

And they've got insurance.

That's a lot.

The insurance system.

Yeah.

So to get a building surveyor like there, there's a massive

shortage of building surveyors.

'cause all the good ones have either retired or moved to Queensland.

And why Queensland?

I, I don't know why, but they just have, and the, and they're actually hard.

In fact, I'll give you a quick anecdote, is it's way harder to sue

someone if they're in another state.

It's just is, it's just the way that the law works, right?

You can't have, the matters can't be heard in vcat.

It's a nightmare.

So you have to find ways of, of getting them.

Anyway, long story short is I think the thinking is with more

inspections means more chances for the building spa to get sued basically.

So, right.

Okay.

Because they need to check and they, like with water, it is hard, right?

Because you probably need to look before and after.

Yeah.

You've gotta go look before you do the tiles or do the, do the, um, bathroom.

We've e every we areas,

everyone has these now, right?

Yeah.

Why can't they, they implement something where you are uploading

into, into a portal that like a Connects type volume or you,

or have a VB eight inspection where you log on and like you

do the plumbing inspection.

For your sewer, you've gotta log your waterproofing inspection.

And if they come, they come.

If they don't, they can't.

Don't.

And it's randomized.

Yeah.

And bad.

Bad.

And it's super easy.

'cause then it does like they're now the ones holding accountable.

Like if they come inspect it and say it's fine, it's on the VBA

A, but then, yeah, or or whoever it is now, plumbing commission.

I actually think that's a really good way to do it.

Yeah, that would be a great way.

I mean the only, just like a sample, like a random sample.

The only

reason why I think is probably the same with everything is budgetary.

Like do they have the budget to do that?

I would've thought,

well, let's put, to be

honest, doing that is just as important given what we just talked about with mold.

Just as important as the base and the frame.

You know, like, obviously

it's probably just, probably, it's probably more important.

That's probably what fails more.

It's the number one insurance claim.

Yeah.

But if, if they're sitting here, if they're sitting here like complaining

about there's no budget for it, what is the actual real cost?

Yeah.

When something fails.

Yeah.

Or the health cost on be massive.

Like, and, and it's gonna be hard to put a number to it too.

I get it.

What was,

what was quite ironic is, is that the government spent like billions

of dollars on the cladding thing.

On the, on the, on the strength of one fire.

Okay.

May, maybe two.

Okay.

Where nobody died.

And thank God for that.

Okay.

And we've, I don't know if you've watched, if you've listeners or

you have watched Grenville Yeah.

That is absolutely horrific.

Yeah.

And like, it's crazy where's a watch?

Yeah, okay.

'cause it's really bad how they, like, how that whole, how the whole cladding, you

know, of buildings became so dangerous.

Okay.

So we're talking about like, um, petroleum based, cause of external claddings, which.

Obviously incredibly flammable,

correct?

Yeah.

And in at LA Cross Tower in Melbourne, it went from the, I

think it was the ninth floor to the 40th floor in about 28 seconds.

Wow.

So it's wild.

Okay.

Now the only, the reason why that wasn't as dangerous is because the cladding

didn't kind of wrap into the building.

It was just an external thing.

Thing it a facade.

Yeah.

Whereas Grenville, it's the, and like they just let it burn.

They thought it was gonna burn out, let's let it burn for like,

like essentially like hours.

And then it, like, nothing happened, like 90 people and they

told everyone to stay inside.

They'd be control.

That was, that was the rule at the time.

It's on Netflix.

It's unreal.

Stay, stay in shelter.

I, I honestly would recommend it to everyone.

It's very confronting, but very like, relevant Educational.

Educational, yeah.

And just how the building, like how building structures have changed over

time, so, and how it, we basically moved to this a CP Luon panel.

Which basically was built from a petrol, like essentially, you know,

condensed petrol on the outside of the building makes absolutely no sense.

Anyway, the story, the point of the story is, is that they did a big

cladding audit, Victorian government and, you know, all makes sense.

And ironically, the, the VBA was covered in a luon panel, which is great.

Um, and they, you know, did an order and, and places were ordered to, to take their

stuff off when they took the stuff off, which had done nothing like, you know,

there'd been no fires and no, no issue.

The actual way bigger problem is all the mold and the rot and the, you know,

the disintegration from water ingress that had occurred behind the panels,

which was just completely ignored.

And that's a way bigger problem that exists across every house.

I mean, I'm just gonna call out also, just call out some irony here is that we've got

these changes now in the act, which is.

Probably gonna make builders more exposed to risk when there is a mold issue.

Yeah.

And yet they're freezing the ncc.

Mm-hmm.

And they're not taking into consideration of ventilator cavities.

And they're not introducing waterproofing.

They're not introducing waterproofing inspections.

Mm-hmm.

So surely these two things should run parallel with each with each other.

Yeah.

Yeah.

They should.

Like I absolutely agree.

I wanna know that like, fast forward 10, 15 years.

Yeah.

'cause I think they're a hundred percent gonna put a levy to fix all the problems

because of the mold and condensation.

Like every other country has done where it's Canada did it.

Uh, New Zealand had a $64 billion problem fixing it right now.

New Zealand had a a list.

So I act in VCAT and building matters in New Zealand.

It's called the leaky building syndrome.

And we have the exact thing.

Mm. We have, they have a leaky building list that just hear

cases about leaky buildings like.

Are we just ignoring the fact that we are like only, you know, what is it?

Maybe I'd, I'd like to say you heard it first

here, but we've been talking about this for ages.

The

crazy thing is though, I reckon 15 years, we are gonna have in some

form of a levy to pay this off.

Where?

Every bill, every bill you've gotta have, it's a thousand

dollars to pay back the problem.

Yeah.

But I want to know in the future, 'cause we build the way we do, can we

like go, Hey, I don't wanna pay that.

Probably not.

No.

Law doesn't work like

that.

Do you know the irony of the situation is that because we are the good builders,

we're the ones that are gonna be there.

We're the ones the other guys are

under, they're done.

They're else.

So it's okay.

So by doing the right thing now we are gonna pay for it later.

Is that what you're saying?

Essentially?

Yes, unfortunately.

Yep.

So it's not good news for everybody.

So be a

builder,

um,

or be

a builder.

Be a good builder I think.

I think be a good builder.

You're gonna pay for it in the future.

Yeah.

Be a good builder.

Get a good lawyer.

Understand your contracts.

Yeah,

I think that's right.

And I actually think.

Which you guys would know better than anybody, that it really comes down

to the people that you put your trust in, which is a lot of the subbies.

Okay.

Yeah.

And with waterproofing, the problem with that whole industry is it's just like

unqualified slash un kind ofd, right?

There's not like, you know, if you're dealing with a plumber mat, like they've

done a two or three year apprenticeship.

Yeah.

4, 4, 4 year apprenticeship.

Yeah.

Right.

You've done an apprenticeship, you've worked and you've seen how waterproof is.

No, I'm not gonna, you could be waterproof.

I know someone that's waterproofer.

I wouldn't trust him to take my dog for a walk.

I don't have a dog, but hey, I wouldn't trust him to do one single thing.

Okay.

Hammer a nail in a wall.

See?

So waterproof is an interesting one because I, I know we, we've got a group

chat and you do all your own work.

No, I know.

I'm thinking of bringing it in house because we can fully control it.

So

we've, but anyway.

Exactly.

I'm signing off on it regardless, so I might as well have my

team trained up over years.

Interesting.

Yeah.

Okay.

So you'd train them up and that's probably not a bad show.

And then independent inspection to come check it off and be like,

well, if anything happened, be like, you also signed off on it.

Interesting.

But aren't you putting that onus onto your team then?

But, but the onus is already on me.

Yeah.

Okay.

So, I mean, we, we use it.

We've, we've got a good waterproofer.

I've been using Paul for a number of years now.

I trust what he does, and he's very methodical.

Do you get a certificate from the VBA?

I get a certificate from him.

These is a VBA certificate.

He's there one.

No.

Well, that's, aren't they technically meant to sign off on it?

No, according to what, but like I, when we put our license down on a billing permit,

we take responsibility for all of it.

Yeah, but do you tick, do you, so you get like your plumbing to tick?

Yeah.

Yeah.

You get your, this is to get the op?

Yeah.

Yeah.

What do you say?

Say his certificate or do you write?

Yeah, no, I get a

certificate from the, um, waterproofer.

Yeah.

And

then do, like, I know with Dave, he makes us write a thing

saying that all waterproofing is sold within line with 37 40.

No, I, I say C certificate issued by so and so.

Okay, okay.

Yeah.

Interesting.

Is that person qualified?

I know that my, well, I've got two.

Two that do.

So one do my external and one do my internal.

So I separate those two because.

Paul just does external waterproofing.

Yeah.

Okay.

And Simon just does, I've used Paul for external before.

Is it,

but are they, do they have a VBA registration, waterproofing?

No, they don't need one.

I dunno.

Isn't, isn't that the point we're making?

That's, yeah, that's what I'm saying.

Yeah.

At the end of the day.

Yeah.

I'm, because your license is on permit,

but Yeah, yeah, you're probably right.

I mean, look, if, if there are owners and future clients listening, like, you

know, we are following the most logical steps in our understanding right now to

make sure that the houses don't look, so I

think, I think you personally, it should be all waterproofing

should be a full license trade.

If you want to do it, you've gotta go through like a four

week course at the video.

I don't disagree with it all.

It's like, but you have to do the waterproofing course.

The issue is the waterproofing standard actually contradicts itself at the moment.

So they're rewriting it.

And we've got someone coming on to talk about that.

And he was saying, essentially saying that.

It's impossible to make a waterproof bathroom comply to the standard right now.

Can't do it physically.

Impossible.

'cause it also contradicts the livability guidelines where

you've gotta have Oh, step, step.

Yeah.

Yeah.

But then you've gotta have a step that's five away.

So now you contradict

that.

Yeah.

We had this big thing with water stops.

Yeah.

Yeah.

It's, it's like a major concern in terms of, you know, oh,

it hasn't got a water stop.

It's like, but in order to create enough fall, I couldn't put a water stop in.

Or this is, this is the other thing.

And then people

argue that you need a PVC water stop.

We use aluminum.

It doesn't say anywhere in the, I think the exposed

water stop looks crap.

Yeah, it looks, yeah.

Weird.

It's like a trip.

Has it?

I don't find it.

If you,

we get as powder coated to match a

tile.

Yeah.

I mean, we did too.

And we, and we, we would typically have it sitting flush you.

You have to have a flush.

Yeah.

And like, there's actually been times where we, I've scraped it out with

Dave, maybe do it, scrape it out to show that there was a, a stop there I go.

This is so the, the amount of times that it gets

alleged that there's no stop, but there is one.

Yeah.

Like now just assume that there's not one.

We get photos, we, we get photos.

Yeah.

I think like your point's valid.

Which is there, there are way easier ways to do this, as you just said.

Like, why can't you just go a portal?

Here's me doing the thing, like photo of the, because

that's what I know plumbers do.

They'll, they'll just take, 'cause once the slabs down,

you can't see lots of stuff.

Right.

But like, why you can't just have an up, like a job, like an aex for the job.

Here's the waterproofing, here's how we did the tiles, here's

how we did the under, under floor heating or whatever it is.

Once it's covered, you know, I mean, I would,

I would argue if you are not doing that as a builder right now, then

you need to start doing Yeah.

But it for your own record.

Because what we've heard now Yeah.

In this chat today Yeah.

Is that you wanna have all the evidence Yeah.

That you can possibly have to prove that you've done something in a certain way.

But the DA

can create an online portal.

You don't have to use it.

You can use it.

They encourage you to use it.

And what they could do is simply you have all your job stages along the way.

You can just upload your photos so it sits there exactly

like we do with passive house.

With

passive house.

And then that way you, they can start to see quickly who's using it and be

like, oh, they're probably at lower risk than the person that's not, but yeah.

Why not

the, the.

That would be so cheap stuff.

The premiums should work like that.

The more you upload, the less complaints, the less you premium.

Yep.

Yeah.

Anyway,

anyway, back to the cha.

What other changes are happening with that?

Okay,

so I've got the, the bill here.

I can read it from the start.

No, I won't do that.

You can read it.

Go for it.

Um, so the stuff with the new commissions kind of already started.

The new insurance will be the 1st of July next year.

Almost certainly.

We

dunno how that's working yet though.

We

dunno.

But it'll be basically what I said, rectification orders.

So first resort you get and is this gonna, is

this gonna replace the current home owners?

So the

old die disappeared, insolvent, triggers won't exist anymore.

But this is grandfather

now.

So my clients now won't fall under this.

No.

So yeah, it all, so this is why, and this is maybe the best takeaway from this,

this discussion, is if like builders are probably better off on the current regime.

I'd be signing your contracts before July next year.

As many as you can.

Okay.

Because one, the insurance is gonna get probably jacked up cost-wise after.

And also, I mean, might be that they just, you know, have a whole new test

on whether, I mean, you guys will pass the test, but what I'd suggest is that

we, you know, that you should get as many contracts as you can under the

old regime because we don't actually know how this other one's gonna work.

Okay.

Now it might work out to your benefit, but you might, are we gonna

know before the July?

Probably not.

No.

That won't tell you that it's coming in, so, yeah, we'll, we'll, we'll

know by probably 30th of June.

June 5th of June.

Um, just for the, the other new act.

So when we say,

when we say New Act, is it completely, so this is

not, this is currently before Parliament.

Okay.

Okay.

And this is about, and

it's a, it's a new act.

It's not gonna be the Domestic Building Contracts Act.

There's gonna be a completely that's being updated.

That's being updated.

So yeah.

You, you are right.

It's a, a bill to introduce new sections to the Domestic Building Contract Act Act.

Yep.

Yep, yep, yep.

It's going to, in, in some senses, help builders because it's gonna move.

The definition of the implied warranties can then be claimed.

So you can have claims against developers now.

So as a consumer, if, um, say I'm the property owner and I get Matt

to build for me, and I sell to you, Hamish, you can sue both of us.

Okay.

Which is good.

'cause instead of you carrying the can for everything.

Yeah.

So if I'm, you're a client, you're like, mm, we're gonna sell it in five years.

Yeah.

You are technically a developer.

Yep.

Correct.

Yep.

Okay, so,

right.

So does that mean that developer now, would they have to hold the 2% as the

client?

No, they don't.

So if, unless you do more than one lot.

Okay.

Yeah, hang on.

Can I circle back for a sec? So you are saying that the definition of

a developer includes a mom and dad?

Yep.

Right.

Okay.

Interesting.

Yeah.

So, in the end, what it's gonna mean is it just kind of spreads this, so what it

says here is developer means a person who entered into one or more contracts for

the construction of two or more homes.

Two or Okay.

Or, or one or more building, which is intended for sale.

Okay.

Okay.

So, so they've

already got a contract in place.

So find intended to sale though, if in five years time you go, oh, I wanna sell

now, well that's not what you intended.

And how do you prove that at the time?

Like, how, how are we gonna prove?

So what need to, you need to have a contract for the, for them

to fit the one you have to have entered into a contract of sale.

Yeah.

So if you sell after, that's fine.

Yeah.

Okay.

I get you.

Yep.

Yep.

and look, I'll just say a lot of stuff we deal with, I'm sure

you deal with as well, is Yeah.

You are, you are working for developers, you know.

No, I'm, I don't, I'm only, I actually, one of my questions when

someone reaches out to me, I might do intend on selling the home.

Yeah.

How, how, how long are you gonna live in the house for?

And if they, if they're like, oh, intend on, like, it's just

a bit probably five years.

I'm like, see ya.

For us, we want mom and dad.

You want, you want to stay like you want build home are, ours are

usually 10 plus we forever homes.

10 plus.

Yeah.

Yes.

Variation.

This is changing on how it Yeah.

So it's moving to the re doing regulations,

essentially it's, you need in terms of notices.

If you haven't complied, you're not entitled to.

So you have to prepare a written, um, variation.

If you haven't complied, you've basically got no chance of recovery.

Except in the most exceptional circumstances.

Okay, so,

so we are talking about variations to work, so Yeah.

Not to the plan.

So it's No, so, so if I upgrades, if I go and do something and I

haven't got that signed off Yeah.

And then it kind of gets kicked down the road.

You are knackered.

Yeah.

And then the client's, like if you've got a bit of a dickhead Yeah.

Saying, well we have, we haven't signed a variation.

Correct.

So, I mean, look, good builders should be variations, should be, you know,

I'm got an email thread that I've got, I jumped in on Monday saying

plaster going on the wall next Tuesday.

That variation hasn't been resolved yet.

Yeah.

We need to get that in front of the client in the next 24

hours and get it signed off on.

Correct.

And look, I'll just probably say like it took a bit for, so the same thing

applies for us as lawyers now, right?

If we have a change in scope, you just can't do it without that.

The client.

Acknowledging that it's gonna be an increase.

Now, even if they ask for it, which most of the time I'm sure that your clients are

asking for the change and it's on inward.

Yeah.

Even if they're asking for it and they know it's happening and they

watched you do, it doesn't matter.

So can I, here's a question for you.

How formal does that process have to be?

Just in writing is fine.

Okay.

So what about a text message that they're acknowledging?

Look, text message

should probably cover it.

So lemme just quickly read it and I'll use,

I'll use an example.

Um, Daniel, we're, uh, about to, put this light fitting in which you've, you've

changed on the fly and I need to rough in at, rough it in now because are here.

It

does say there's exception for, um, urgent where it's a danger to health or property.

Other than that, they must be in writing.

So all signed by both parties.

Okay.

But if I send you a text message won't cover it.

So signed.

So even worse.

So if I, unless you do DocuSign.

So what if I'm now on site and we're doing excavation, hit.

Stop,

stop at work.

Stop work.

So I,

I just one also, you should just go, I mean, like, not to be a dickhead one,

I've gotta do a time amendment, right?

Yeah, yeah.

Have to because it's gonna take more time.

So, okay.

So rock's a great one.

'cause I've literally, I'm experiencing this at the moment and luckily we've

got a signed variation from the client.

I'm like, I don't know how long this is gonna take.

Yeah,

we haven't agreed.

So

all we need to do is say when it started.

Okay.

And I'll tell you how long it took.

When it's finished.

Yeah.

Okay.

This will delay you.

I'll let you know how long later.

But, but,

but the cost are, I've got no idea what the cost, the cost

you just, so you gotta go away.

It is a provisional sum.

Can you do a variation?

So you, you can do rock, in my opinion, rock slash any foundational

stuff should be a provisional sum.

Yeah, I've, yeah, because it's too dangerous, but also in the contract.

So hang on.

You

can't do cost escalation for a rock, so you can, so now it's one

of the changes I've just about,

so can I just circle, can I just circle back for a sec?

So foundation works.

So say if I'm digging footings for a slab.

Should my slabs now be provisional?

So I always do my slab provisional.

You can, but as Matt just said there, you can't, you, you can't

then claim for something that you wouldn't have been aware of had

you done proper investigations.

Yep, yep, yep, yep.

Okay.

And that's the foundation's data, like geo tech stuff?

Yeah.

Yeah.

So you can, we can just

go for geotech says there's rock.

We actually in our contract, have to make a rock allowance.

Yeah.

So we've allowed 20 grand.

If it's 50 grand, then the owner plays the 30 plus a margin.

Yeah.

Okay, cool.

Yeah.

So anyway, there, there's a whole bid around cost escalation,

which I won't go into.

It's actually quite confusing.

But there, there's a bit more scope now for builders to do, have cost

escalation and increasing prices to allow for, you know, what's happened really

in the last five years, but only for

contracts over $1 million at the moment.

Essentially.

Yes.

if you've got, if you've got a a million bucks.

You can't have, if so, it's less than a million.

You can't have a cost escalation clause.

And if you do, you have to have a prescribed, you have

to sign the prescribed form.

So would that, will there be, we don't know this, am I now getting you to

write that as a special condition?

Or there'll be something just in, there'll be something in there.

Yeah.

So they'll have

to mean, so MBAV?

Yeah.

Um, HAHA and whoever else is writing them, because CAV at one stage wrote a contract.

But those two entities, abic as well.

Oh,

let's, but, but we're gonna get to Abic in a second.

Your, I actually bought an Abic in before.

I gotta show you how bad it was.

But anyway, we won't talk about that.

What, what are quick,

what are your thoughts on Abic contracts?

I hate them with a passion.

Why?

They, they're just so clunky.

Yeah.

You need two pieces of paper to read.

Two, you need the same contract twice.

Yeah.

Yeah.

Well, you gotta have the terms and the, the, the, um, you

know, the appendix or whatever.

It's just, to me it's just like, I mean, if you're using an architect,

yeah, maybe they're useful.

I, I find the MBAV contract and the HIA contract quite easy to use.

Okay.

It complies with all the, the requirements of the Dementia Building

Contracts Act as it currently exists.

And you can put in a special conditions for a superintendent if you wanna

go down that path or prescribed, uh, inspections with the architect.

Correct.

You, you can put in lots of things.

I mean, at one point Matt came to me with what could only be described as the

worst shopping list in the history of mankind, most of which were internally

inconsistent, however you've narrowed it down to a nice five or six version.

No, we got, we've got about 15 still 15.

Okay.

But a lot of them are like simple like yours.

Yours is like ability to use your, your marketing and stuff.

Yeah.

It is good.

We,

we have a C clause in there for oversized doors.

Yeah, you've got that one.

Yeah.

Yeah.

Reckon Actually we, we might've, we might've, we might've.

Yeah.

But like

you some and, but yes.

This, they're all ba like most people read it now and go

they on all that makes sense.

No,

they're good.

They're easy.

They're easy to read.

I, I've seen ones from like, I'll just say they're more like new builders who

have stolen them from other people.

And what it is, is they actually just create an inconsistency with what is

very reasonable general conditions.

'cause especially, yeah, I think the, I

I'm an easy I contract.

I think it's a great contract.

Special conditions override

anything in the contract.

Yeah, they do.

Yeah.

Yeah.

And that's the problem because if you're overriding the general condition and

their general condition makes more sense, it creates this inconsistency.

Yeah.

And people get confused.

And that's when you, as a lawyer can argue.

Yeah.

Well I can say we're using the special condition, which makes no

sense, but that's what it says.

Yeah.

Anyway.

Yeah.

Okay.

what else is there?

Okay, so,

um, there's a lot to cover, A lot to cover.

Um, so pro we talked a little bit about how they're gonna do progress payments.

Um, it's still really not known that they've just got

No, it's really not known.

This is gonna be, I think, up for debate.

Just a question

for the progress claims.

Yeah.

I'm just gonna use some really simple understanding of contracts.

Yep.

Can you sign a contract between two parties and agree on any changes?

So if the contract doesn't allow to have the progress claims that we want.

Yep.

Are you able to, uh, append a, uh, contract?

A schedule A schedule, how you want to do it?

How we want it?

Yeah.

I'll say yes.

Subject to We haven't seen the finer details.

Okay.

Yeah.

However, I, I'd be shocked if you couldn't do a very similar thing to method B.

Now, method B um, was made under regulations.

The reason why I'm talking about that is the act probably won't

even tell builders how to do it.

They'll just say, what they'll say is what you can't do.

Yeah.

Okay.

What you can't do as a builder is you can't ever seek money before it's

actually been spent in terms of the value.

So it's essentially trying to avoid prepayments because

they don't like prepayments.

The only prepayment you make is the deposit.

Everything else, the bank, then else, well, that's

fine.

Make that deposit bigger.

Look, that unfortunately is what

it's, that's why make that deposit commercial versus domestic.

Yeah.

Is, you know, the balance of power is with the consumer.

Like your balance of power is back here.

Whereas in a building, in a commercial contract, you can go,

oh, 50% before I've even, you know, turned up on time or, or, or our

trades.

This is the other thing.

And so this flows onto trades.

Are trades now forced to follow these same, so, so what

the modern method of contract, so the methodology of why that and why

I think eventually you will get more flex is they might let you start

seeking more significant deposits.

Yeah.

Four subcontractors, four materials.

Four.

Well, as as we moved, as

we move to more offsite fabrication.

Yeah.

Like you have to have to Yeah, you have to do it like windows frames.

If all of a sudden now if all of a sudden stone bench to Yeah.

Yeah.

That could be 50 grand.

Yeah.

What are you gonna fork it out?

So, so if my and my trades comes to me and says, I want a 50% deposit.

Yeah.

Is that illegal?

Uh,

no.

The trade can do it because the trade's not governed by the

domestic gooding contracts Act.

So that, but, but then,

okay, so what are they covered by this?

The nothing.

Yeah.

So

your, your subcontractor agreement, your

subcontractor between you and Subby is the same as you like building, like

for, you know, OU Simon or something.

You are,

yeah.

You are not govern by, you are not the consumer.

They're not a consumer.

So the only person, this really applies to anyone.

Well, what if they had like a carpentry license?

It doesn't matter.

It makes no difference really.

Okay.

The contract with you.

So the Domestic Building Contract Act governs the relationship between you as

the builder and the owner, and that's it.

If I was a builder and I was getting a licensed carpentry crew in Yeah.

Would I be signing a domestic building contract with them?

Are

you gonna be a the builder on the job or not?

Yep.

Yeah.

You would need to get DBU or us.

You could.

One, you couldn't get insurance.

The No,

no.

I'm talking about like if I get a A, A A license, A DBL to come and do the Yeah.

Dbl.

Yep.

And on the DB Yep.

Would I be signing a domestic building contract with them?

No.

Okay.

So they's just, they're, they're just a contract.

They're a contractor.

Yep.

Yep.

So that only comes into play if we've got own builders.

Yep.

So really as a builder, we have nowhere to move.

Like we are actually quite, it's very structured, very rigid.

Yeah.

Yeah.

Okay.

And, and look, you know, at the end of the day, I guess it's kind

of, I get it, you know, the home is their, you know, their dream and they

probably do it once in their life.

Most owners actually have no idea what they're signing a lot of the time.

I mean, a lot of the time I speak to why'd you do that?

We, we have a lot of homeowners listening to this podcast.

Yeah.

What would your advice be?

When

I, I would get, like, this is sounds self-interested, but you should get

advice, like, people go and buy homes and flats and car parks and you know, a car

and you probably get legal advice, right?

Maybe not a car, but you, you buy a flat, right?

If you buy an apartment in a building, the chances of something being wrong

are actually extremely minimal.

Right?

You've got owners corporation, you've probably got, in terms of you ba you're

basically buying airspace, right?

The, the chances of something going wrong with a finished product.

Right?

But you are gonna get a lawyer to look at it.

Oh yes.

It says settlement in 90 days and.

10% deposit.

It's like, sweet.

But you negotiated yourself a building contract.

Probably.

What?

What's the average contract now?

500 grand a mill.

Everything's over a mill, it seems.

Yeah.

Yeah.

A mill owners don't get them looked at, like it's actually bonkers.

Yeah.

There's things with time, there's things with cost escalation, there's

rock, there's, you know, weather, just even weather, just weather.

Weather.

There's, um, material shortages, there's variations, there's, payment schedules.

There's who's the sub, who's the builder, who's the insurer?

Um, who's the building surveyor?

Like all those things, moving parts, and they're not getting advice.

I, I, I just, it's just career suicide to me.

Yeah.

So, so your advice is for homeowners to, to when you're building, when

your builder gives the contract Yeah.

For review.

Yeah.

You should go and get that looked at by one.

You should

absolutely do that.

Yeah.

And you should also do due your due diligence on the builder.

Yep.

It's really easy to do you one.

Google's extremely helpful.

I know if anyone knows about that.

Um, sorry.

Sorry, what was that?

Google.

Google?

Yeah.

Google.

Google.

How do you About Google.

How about Bing?

Bing doesn't work.

Ah, ask you just gt.

But you should do some actually to, to be honest, I'd go as far

as to say, Hey, can I like come and see a little bit of your work?

We invite them all.

Yeah.

Yeah.

It's a great idea.

I

sat, I sat down with a client before this today, well, a potential client.

And I said, look mate, I've got a project around the corner.

We're doing exactly what you're, you are asking me if we can do in your

house, what are you come and what do you come and talk to my trades?

We come and talk to my supervisors.

Yeah.

The client lives out.

Great idea.

Have a chat with the client.

Yep.

Yeah.

Um, and see now when someone reaches out, our first thing is like,

we, what reference do you want?

We won't even tell the client, how

many do you want?

How many, how many phone numbers do you want?

Well, soon, now we're about to

move in our house.

I'll give 'em to Cole as the client, my wife, and probably have no more work.

Um, that's

not, I did actually have, um, there was a, there was a case that I did once

and the builder, when the builder got a complaint, they said, oh, look, you

know what we'll do is I'll send you over to this guy named Ron Jenkins.

Right?

Anyway, and then I gets an email.

He said, look, I'm Ron Jenkins, I'm your client liaison.

I'll deal with your dispute.

And the client's like, oh, great.

I've got Ron on the job, da, da da.

Anyway, as the kind of thing progressed, it worked out that Ron didn't exist.

It was just an alter ego of the actual builder, but it was like

their way of creating this, you know, dispute resolution kind of.

Party.

So you know, you could do that.

You can,

I dunno if that's genius or that's illegal.

No, no.

It's not illegal allowed.

Do it.

Yeah.

So look, I mean there's, we've covered a lot today and I kind of feel like

this could be like a 10 part 10, maybe a regular or, or maybe, um, regular too.

I mean, maybe this is my way of getting free legal advice.

Yeah.

It's actually a great way.

So how, how we, what this contract is, could we just go

back but you say owners should get legal advice.

I think builders, I was just about to say that that was gonna be my follow up

and what I'd suggest is get in early 'cause then I'm not conflicting.

Yeah, I know.

Yeah.

So how, how, I mean, I'm gonna be grabbing your details after this for sure.

Yeah.

So how do people get in contact with you?

Yeah, so our firm is Oldham Construction Lawyers up here.

Um, well we act for a lot of, uh, builders like Matt, who I've known for a long time.

And kind of seeing you develop over the years and,

but it's not acting, it's actually just guiding us to do the right thing.

Yeah.

It's not, that's the thing.

Most of the time when I

say act, it's, there's actually been zero disputes.

Yeah.

It's been, yeah.

But you,

you've probably had zero disputes because you've Yeah.

No,

it's it prevention.

But also sometimes you'll ring me and I'll say, you should just go and look at it.

Yeah.

And then it gets resolved.

Prevention, I think you Yeah.

And, but I'll just say when you've come to see me, I've gone Look, your

terms and conditions are really clunky.

You need to strip them back.

Okay.

And also, here's the things that in your contract that I reckon

you need to think about time.

So you didn't say that.

You said they suck.

Yeah, they suck.

Okay.

But time, like the way you break up your stage payments was actually really good.

Um, when you say time, what, what, like just how you calculate time and, and

making sure you're taking into account the fact that, you know, the surveyor can

take a long time to get a permit and the.

You know, the owner can take.

So just that, are you talking about

the length of the contract?

Length of time?

'cause the ation starts once the demolition's completed, hasn't it?

Not

not.

So that depends on the contract.

Most of the time it's, it's a deemed start date, which is 14

days after the building permit.

So if you read HIA, yeah, yeah, yeah.

Clause eight.

And most of the time, so

I'm, I mean, I don't know.

And again, I'm probably just giving you some free legal advice.

We issue a start notice.

Yeah.

So that's great.

Okay.

I'll just tell you, I've, I've acted for 10,000 builders.

I reckon I've seen commencement notices like four times.

Oh,

we do?

On every builder.

Yeah.

Every job.

Yeah.

So a lot of people don't do em every, every job.

Oh, I thought I said, yeah.

I've actually, it actually says that you, I've, I've got it in my

crm it says that you gotta do it.

No one does it.

I've got it

in my cm. That goes out automatically.

But a lot of the time I override it.

But yeah, I, we, we will issue a, it's

like the easiest thing.

'cause then, you know, well, oh, that's when I started.

Yeah.

It's like, saves you all the work.

The only

thing I'd say is that you can send it, if you were deemed to have started earlier,

then it doesn't matter when you said Yeah.

So that, that's probably another whole Yeah.

So there's a deeming provision.

Deeming, yeah.

But

could you, could you technically override that though?

No, you can't.

So what it says is the earlier of da, da, da.

So when you send the commencement notice, or 14 days after the building permit.

So just read, read your contract.

Coming in and just going through it and like Matt and I have done provisional

sums, how to use provisional sum.

I think he used di you, Dylan,

Dylan from all projects come.

I think you met Dylan.

I think he come through.

Yeah.

And he got whipped into shape.

He's like, dunno why.

And do you

know what, I think getting ripped into shape is a bloody,

it's even that, it's like, it's

just, hey, you're just, you're not using the the, the contract

Yeah.

To its full, you know, extent.

'cause yes, it's consumer friendly, but there's ways to make sure

that you are also getting enough.

Yeah.

It's, um,

getting enough capital to run the job.

It's

probably one of the smartest things that I've done as a business one, because it

not only protects myself from doing things correctly, but also protects my clients.

Yeah.

Yeah.

Like it just, if anything was to go wrong, it's clear.

Well if you, as

you were saying before, if you are Suby asks you for 50% right?

And you're like, fuck.

Oh, I actually can't afford that.

Right.

And, and you are like, well that's gonna tip me over the edge.

That doesn't help your client either.

You not being able to finish doesn't help anyone.

Yeah.

They're paying rent, they're paying, I dunno if you're gonna be able to answer

this like explicitly, but I've got a overheads calculator

in my business, right?

Yeah.

And I, and I app portion, certain chunks of money when I'm forecasting.

Yeah.

Every year.

So accountant, bookkeeper.

Yeah, yeah, yeah.

Blah, blah, blah, blah, blah, blah.

Is there a number that you would just say like a baseline number for a

medium, not a small builder like us?

Like 10 grand, 15 grand worth of legal fees that we should just include in hour?

Oh no,

you honestly, three grand.

Oh, three grand.

Yeah.

Okay.

Well, and not even that, but that's good to know.

But just even you saying that probably welcomes the, in the conversation I

conversation probably go, I'd even go,

I'd go two grand.

Right.

And maybe spend $1,500 on a, a good accountant to make sure

that you are kind of also.

Maximizing the, the like there, there's a lot.

I'm sure that you've gotta Good.

My account cost

me 25 grand a year.

Really?

Yeah.

Wow.

Okay.

Well

wait, hold on.

That's, yeah, 2025.

Quite high.

Including your, everything.

The whole top, top to bottom book bookkeeping is on top to bottom.

Um,

yeah.

Yeah.

It's high.

It's high.

Anyway, doesn't matter.

Um, um, but, and, and then, yeah, I mean, maybe Mike, I hope you're listening.

We're gonna have a chat about,

we're gonna have a chat out this,

but yeah, I would just say maybe sitting down with me for either owner or builder

will probably, you know, you may go, ah, that was, you know, that was helpful,

but I'll probably never use it again.

But I'd say the advice I've given maybe you on special conditions and

provisional sums and aey contracts.

ABI contracts.

If you are a

builder wanting to do an ABI contract, you're fucking, yeah.

They're a man.

You're a fucking idiot if you don't come.

Do it.

Straight up.

Yep.

Great.

Awesome.

But yeah, you get in contact with Daniel, um, it's, um,

yeah, daniel@oclawyers.com au.

You can email me.

I'm.

Normally responsive.

Don't ring the phone.