Law Clarified
Law Clarified
Ep 1: Owners Hour - Choosing your Builder
Hi Queensland property owners!
In this episode: we discuss the things that you need to think about when choosing a builder to build or renovate your home.
Building or renovating a home is a huge financial and emotional investment. We want to make sure you have everything you need to choose the best person to support you in building the house of your dreams.
Got some thoughts on today's episode? Please join our conversation on our Instagram page @hearthstonelegal.bne
Check out our website: https://www.hearthstonelegal.com.au/
Send us an email: law@hearthstonelegal.com.au
Thanks so much for listening!
Hi, welcome to Hearthstone Legal. This is season two. Season one was our toolbox. Tuesday episodes targeted towards our builder clients. Um, season two is our owner's hour. So this is for all of you out there who own a house are thinking about building a house, doing some renovations. Um, this is your time, this is your season, so let's get into it.
Speaker 2:Half stone legal presents a real talk of the good, the bad, and everything in between for all things business and construction law, whether it's navigating a dispute, the qbcc, or guidance on a contract, we give you a rundown of some of the dos and the don'ts. These are digestible chats on topics that you might hear in our office of an afternoon. Daunting, not anymore. Here's Law clarified.
Speaker 1:Well, hi everyone. Old listeners, new listeners. Um, welcome to Owners Hour. In this season, we're gonna cover, um, things that we think are the really important points for owners, whether you are thinking about building a house, whether you're thinking about renovating your house, um, whether it be a small Reno or a big Reno. These are some important things that as an owner, you should think about. So, season one, if you haven't heard it already have, check it out. Um, we focused a lot on the builders side of things, and a lot of that information was important for owners, but I think it's really necessary to have a, an owner centric, um, session. So that's what we're gonna do, um, in this particular season, season too. And with me, uh, I have the lovely Kelly who is joining us for this, this season. Hello. Hi, Kelly. How are you?
Speaker 3:Hello. Hi, Marty. I'm well.
Speaker 1:That's great.<laugh><laugh>. So you just recently joined Hearthstone Legal. Congratulations.
Speaker 3:Oh, thank you. Thank you. Thank you for hiring me. Oh,
Speaker 1:We love having you on board. I
Speaker 3:Appreciate that
Speaker 1:<laugh>. And, um, I've heard that this is your very first podcast.
Speaker 3:My very first podcast.
Speaker 1:Oh, popping the podcast. Cherry<laugh>.
Speaker 3:Thank you.<laugh>. I think, yeah,
Speaker 1:Yeah, definitely. Let's see how it goes. Um, so Kel, tell our listeners a little bit about you. Okay. Because everyone knows a little bit about me.
Speaker 3:Yeah. Okay. Um, I probably should explain. We, we know each other. We've
Speaker 1:Known each other for quite
Speaker 3:Some time. We've known each other for quite a, quite a while.
Speaker 1:More than a decade.
Speaker 3:I think it's creeping up to two.
Speaker 1:Oh gosh. Okay.<laugh> a while.
Speaker 3:A while. A while. Yeah. Um, so I, I met Marty, we met, um, working at the former Building Services Authority, the Yes. Building industry regulator in Queensland
Speaker 1:Back in the good old days,
Speaker 3:Back in the good old days,<laugh>, now the Queensland Building and Construction Commission. Mm-hmm.<affirmative>, that's where we met. Yeah. Um, so my background is I am a lawyer. Yes. Uh, that was, um, you know, that's what I am<laugh>. Yes. And that's how
Speaker 1:We met among many other wonderful things.
Speaker 3:<laugh>, among other things,<laugh>, um, practiced law for oh, a, a good while mm-hmm.<affirmative>. Um, and just briefly, I started in the former Building Services Authority in their in-house legal department in my law career. Worked my way up the ranks, so to speak, within the organization. Yep. I then had a very brief stint in private practice mm-hmm. As a senior associate in a mid, mid-size law firm in Brisbane. Went back in-house, uh, into the Building Services Authority and had various roles within the organization. And it's transitioned to the, to the current Q vcc, um, before doing other career twists and turns.
Speaker 1:Yeah. Taking a little side
Speaker 3:Step. Taking a side step. And now I'm, I'm back shoes back. I've, I've kept my practicing certificate over all that time, and now I've come back. Yeah.
Speaker 1:Oh,
Speaker 3:And here we
Speaker 1:Are. And I can say to our listeners, I'm very excited about the return<laugh>.
Speaker 3:Thank you.
Speaker 1:Um, but we'll see how it goes in this podcast. It's ooh, you know, no mistakes.
Speaker 3:<laugh>, is this my first performance review?<laugh>. Okay.
Speaker 1:It is unofficially. Okay, Great. So, um, you've listened to our builders episode Yes. Toolbox Tuesdays. But we talked about, and this has been a plan for a while to do our owners hour mm-hmm.<affirmative>. So I think what's important to cover is today just a bit of a general chit chat about picking a builder, things to think about. We'll then deep dive a little bit more in a, in the next episode about the contract, what to look out for, what are some tips and pitfalls. Another episode we're definitely gonna cover the Q B C C. Yes. Yep. And, and I think you and I probably could talk for hours Yes.
Speaker 3:About
Speaker 1:The Q B C C. Yes. We,
Speaker 3:We only because we know the structure so well.
Speaker 1:Yeah. And, and I think that's a really helpful thing for our clients is we understand the mechanisms of the Q bcc mm-hmm.
Speaker 3:And, and the many roles that it can play Yes. In a construction project.
Speaker 1:Yeah. Um, and some of the misconceptions I think that people have about what it can and can't do. Yep. So we'll cover that. Um, and then we'll talk about, you know, the really sticky end of the situation. What happens if everything goes really, really bad? And you, you have to end up having a legal fight Mm. With your builder. Yep. Um, so that's I guess the rough plan. The
Speaker 3:Rough plan. Yeah.
Speaker 1:So today, Kel, I know this guy, he seems to be a really great builder. It'd be pretty cool if he built my house, right? Oh, is
Speaker 3:He your brother's cousin?
Speaker 1:Yes, he is. Is
Speaker 3:He?
Speaker 1:Yeah.
Speaker 3:Yes. Yes. Is that cool? Well, potentially, yes.<laugh>. Oh look, referrals, it's how, it's how things get done these days. Right? It is, you know, you are at the family barbecue or even in the workplace, um, you mentioned to somebody, oh, I'm looking at getting my kitchen renovated. And then the conversation invo evolves mm-hmm.<affirmative>, and all of a sudden your brother's cousin is in your kitchen
Speaker 1:Amazing.
Speaker 3:Renovating your kitchen. Yeah. Um, that's how it works. You know, referrals and networks. Um, and there's nothing wrong with that. That's
Speaker 1:Right. It can be very
Speaker 3:Good. You know, I sh I, I want to preface, I guess for all of what we say,<laugh> as litigation lawyers, we only deal with the disasters
Speaker 1:We do.
Speaker 3:When you think about the quantum, the site that how much building work is being done in Queensland, that there is so much going on. Markets are booming. We only see a small part of the, the works that are going on. So we would only see a small percentage of the work that's being done out there. And 95% of the time nothing goes wrong. That's right. And the, your brother's cousin does a stellar job. Yeah. And there are no issues. Yeah. Um, but there, you know, in our experience, given, given how where we work and what we do, we see the disasters. And when it goes wrong with your brother's cousin, it goes very wrong.
Speaker 1:It really does. Yeah. And most people will have heard or be aware of the significant issues in the building industry at the moment. Mm-hmm.<affirmative>, there was a big boom, covid happened. Lots of grants, lots of issues with supply. Yes. Materials, contractors, builders going into liquidation. Uh, it's, it's a really complicated fabric at the moment. Um, and, and people would be aware of that. Uh, if I'm honest, I would be really scared, I think, in trying to make a decision about, okay, I'm gonna build or renovate, where do I even start with picking a builder? And I wanna talk about that because yes, your brother's cousin might be really good. I have a friend who had their house, um, very significantly renovated a couple of years ago, and the builder that they got didn't do any advertising, literally just works for, um, doctors. This, you know, particular profession and it's doctor referral to doctor referral referral. Mm-hmm.<affirmative>. That's how this builder gets his work. Yeah. And he does great work. Um, but my friend was like, oh, you know, he did, you know, I'll mate my colleague doctor's house and it looks really great and he should be good. I'm like, like, Let's just hold up. Let's, let's just do some searches. Let's do a little bit of due diligence first. Um, it worked out really well and it can, as you said, it really can. Referrals are very powerful in any, you know, in any industry. Um, but regardless of how good your mate's house look, looks after the job is done, we still recommend that you do some checks for yourself.
Speaker 3:Absolutely. Just do the checks. And I've just had this thought, is your brother's cousin also just your cousin? I dunno if that's a good analogy or not. Someone can
Speaker 1:Quite, possibly,
Speaker 3:Possibly easy. Just let us know. Like, I'm not quite sure that family tree works,
Speaker 1:Considering I don't even have a brother. I'm not even sure who this person is. I
Speaker 3:Don't have a brother either.
Speaker 1:<laugh>. Anyway,
Speaker 3:Anywho, back to the point. That's right. Yes. We would recommend, absolutely recommend doing some research Yes. In lawyers will talk about due diligence, but it's research checking. Yep. You know, the, the finan, just the financial inve investment alone. Mm-hmm.<affirmative> in a renovation project or a new build, it's significant. Mm-hmm.<affirmative>, um, a kitchen renovation is a significant financial investment, let alone the emotional one. Yes. Um, so ple, please, please, please spend some time doing some research. Absolutely.
Speaker 1:And it's not hard. It's
Speaker 3:Not hard. Have the internet gives you access to so much information.
Speaker 1:I know.
Speaker 3:Just do a Google search
Speaker 1:Q B C check that they're licensed. That's a good start. Q
Speaker 3:B C C license search,
Speaker 1:Google search, as you've said, product reviews, reviews of the builder. There's lots of Facebook pages about certain builders. Yeah. Now some of that, and some of those comments and reviews have to be taken with a grain of salt.
Speaker 3:They should be metered. Yes.
Speaker 1:I always, uh, the analogy I think of is if I go on holidays, I'm looking at places to stay, I might look at, you know, we're gonna Tasmania soon, I might look at some Airbnbs and I'll look at some of the one or two star ratings. Say, you know what, this looks really lovely. What's the problem? Ah, ah, there was crinkles in the sheet. Okay. If you are complaining about crinkles in the sheets, I'm not gonna take any notice of your review. You know, there's people who have very high expectations. So every review that you read, good and bad, you should just take it with the, take it for face value,
Speaker 3:Read it.
Speaker 1:Exactly. If you
Speaker 3:Read a review, stumble across a news article, stumble aro across a blog or a chat, or a Facebook group or a page that discusses the builder that you are looking to use. Mm. I recommend talking to the builder about that. Yep. Get their perspective on it. There's absolutely, there's something in the review that you know, you want, you want to ask mm-hmm.<affirmative>, um, you know, when you look at it from the builder's perspective, they're trying to operate a successful and profitable business. Yes. Most business owners would say perhaps that they accept that there'll be a p a small percentage of customers or clients that they just don't satisfy. Mm. Um, and that's the reality of operating a business. Um, if you come across a piece of information about a builder that you're looking to use that raises questions for you ask them about it. Mm. People, business owners leaving aside, you know, the context that we're speaking, the building and construction industry, business owners want to run a successful business. They will want to talk about their reviews. Yes. They'll want to explain the situation. Um, and I would think they wouldn't shy away from that. Absolutely. Someone who's doing their research, someone who is wanting to ask questions, they'll want to engage with a conversation about that. Mm. I would think. Yeah. Uh, and if they shut down and block you off, that might be a red flag.
Speaker 1:Yeah. And, and that brings us to the red flag issue. Mm-hmm.<affirmative>, we talked in, um, the toolbox Tuesday series about the fact that entering into a contract with a builder, it's like a, it's like a new relationship. Mm-hmm. A and you treat it that way. It's exciting. You know, you get caught up in the, the pretty pictures on their website and things like that, and it's very much a new relationship. But you want that relationship to be open and honest and transparent. And I think one of the really important things is looking at how the particular builder you are thinking about engaging responds to those negative or, or not so glowing reviews if it's completely ignoring it. I mean, that might be, that might not say anything. It might say something. Yeah. But if they approach that with a, you know, dear Dave, thank you so much for your review. We're sorry that you had this experience and you know, there's some sort of response that is constructive. I think that's important in You're absolutely right. Ask about those things. Just like in a new relationship, you have to have difficult conversations about, this
Speaker 3:Is suddenly a dating advice podcast,<laugh>, but the analogy is
Speaker 1:Absolutely,
Speaker 3:Is appropriate. You
Speaker 1:Have to ask those
Speaker 3:Things. You have to be comfortable with the person who's going to be building your house or in your house. Yeah. You have to be comfortable.
Speaker 1:That's exactly with the right. And if they can't answer your questions to your satisfaction, then maybe that is a red flag, maybe. And you should trust your gut.
Speaker 3:Yeah. Yeah. Because
Speaker 1:Cuz as you say, this person potentially is gonna be in your house for a period of time, for
Speaker 3:A period of time. They're gonna be in your space. You need to be comfortable with who's in your space. Yeah. I,
Speaker 1:I think I think so too. Or they're gonna be responsible for building the house of your dreams mm-hmm.<affirmative>, which can very quickly turn into a house of nightmares.
Speaker 3:It it can, it can. Yeah. Certainly in our experience, we see the nightmares. It's, it's really unpleasant.
Speaker 1:It is. And look, no one ever engages us because they had a great time with their builder. They love their
Speaker 3:House. Yeah. We don't see those,
Speaker 1:We never hear about that
Speaker 3:<laugh>. No<laugh>.
Speaker 1:Um, so yeah, I, I think those things are really important. Do some searching, look at some reviews, ask some questions, talk about things with the builder upfront. Express the concerns that you might have and, and just sit with those answers and trust your gut if it feels right. Mm-hmm. Um, you know, I'm not talking about any sort of, you know, um, hippie sort of star gazing stuff when I say, you know, let it sit with you and see if it feels right. But you get a feel for these things. You
Speaker 3:Do, you do. The other thing I would say, just as an extension to that too, is if you are like, really ask yourself what you expect from your builder or your trades person mm-hmm. Around communication with you, and you will have some expectations whether you are conscious of them or not. Yes. You will. E and when I say expectations, I mean things like, well I actually expect my builder to give me regular updates mm-hmm. On my build. Yep. Or my renovation. Okay. I expect that. How frequently do I expect those updates? Mm. How do I expect to receive them? Like, asking yourself, yourself, those kinds of questions and flushing out those kinds of expectations and having a conversation about that with the builder upfront will really help to minimize the risk of miscommunication and upset down the track. Yeah. Absolutely. Be be honest about that. Yep. And the builder might come back and say, well, I actually can't update you every day. Mm-hmm. Cuz I'm managing 10 building projects and I, I I just cannot do that. But a compromise might be, if you have any concerns, send me an email and I'll respond within 24 hours. Mm-hmm. Like, you can have those conversations. Yes. Flush out those expectations, get them clear early. Mm-hmm. It could save you tens if not hundreds of thousands of dollars down the track and time and emotional energy as well. Yep. Um, we'll, we'll probably say this a couple of times throughout this, this series, but building disputes are, cause the primary, if not sole cause of building disputes are miscommunications.
Speaker 1:I 100% agree
Speaker 3:There is, there is an unmet expectation, a misunderstanding or a miscommunication at a point. Mm-hmm.<affirmative>. And if that is not identified, managed, resolved, that's how a dispute happens. Yeah.
Speaker 1:Similar to a fight in a relationship
Speaker 3:<laugh>. Exactly. Yes. Where
Speaker 1:Both parties are too stubborn to raise it. Yes. Brush it under the carpet. Before long that carpet has a huge
Speaker 3:Big line lump in it.<laugh><laugh>
Speaker 1:And, and you end up having to call a lawyer. Yeah. And that's, I mean, that's what we are here for. That's what we do. But, but
Speaker 3:That's what we do. We resolve misunderstandings. Yeah. Miscommunications, we iron out expectations we get
Speaker 1:That's get things back on track. That's
Speaker 3:What we do.
Speaker 1:Yes. Yep. Um, hopefully
Speaker 3:Without too much expense time or emotional energy expended. Yes.
Speaker 1:But sometimes it is the case that the dispute has either gone too far or the parties can't come back.
Speaker 3:They can't come back. Yeah.
Speaker 1:Sometimes the trust is
Speaker 3:Just they need to
Speaker 1:Divorce loss and Yeah. Yeah. It is essentially that's how it goes.
Speaker 3:Mm-hmm.<affirmative>.
Speaker 1:Um, I think another really important thing, and this is r I mean this is always relevant, but I think it's really relevant now, especially given the climate, the increases. Again, a lot of people are probably probably heard in the, um, news about builders asking for tens of thousands of dollars to complete the home because costs have gone up. Those sorts of things. Budget is a really
Speaker 3:Yes.
Speaker 1:Really important thing. Unless, and I've said this before, unless you have a secret money tree in your backyard where it, it doesn't matter how much the build costs, you just don't care, then you need to be really aware of money. Yes. And I've spoken to a couple of clients about this just recently saying, okay, you're about to enter into a contract for X amount of dollars, but here are some of the pressure points where that contract sum can actually increase a, and it can increase much more than you expect for various reasons, which we'll talk about in a couple of episodes. Mm. But budgets really important,
Speaker 3:Really need to be clear about your budget envelope. Mm-hmm.<affirmative>, um, and I'm a conservative person naturally, like my risk threshold is<laugh>. I'm not a risky person.<laugh>, I'm afraid of heights like<laugh>. But, um, if I were to build or renovate a home, I would be very clear about my budget envelope. And I would also expect there to be some kind of overrun either way. Either under or over, but probably over. Yes. Given my nature as a person. And, um, I would recommend that, um, if you are looking at building or renovating that you have a clear budget and you also do some, this is gonna sound, I'm not sure how this is gonna sound, but like scenario testing. Yeah. Like what happens if the build period is longer than you think. Mm-hmm.<affirmative>, if you are renting somewhere else while your home is being built, can you carry the cost of paying additional rent for six months if the project overruns?
Speaker 1:Exactly.
Speaker 3:What are you gonna do if you can't move in Yep. On the date in the contract that says is the date for handover? Mm. What are you gonna do? Um, and do some of that thinking. Yep. Um, how can I carry these costs if the tiles that I want suddenly double in price? Yep. Like what are you gonna do? Yeah. Where are you gonna get the funds for that? Yes. Do you have a plan for that? Um, hopefully you never need to execute those Plan Bs, but it's really sensible to think about those plan Bs. Yeah. And to expect time to run over and budget to run over. Yes. And what does that mean for you?
Speaker 1:Yeah. And, and I think too, um, there's language that is used in the, in the building industry and one of them, which I think is quite problematic is the term fixed price contract.
Speaker 3:Mm-hmm.<affirmative>,
Speaker 1:It's, it's embedded in legislation. It's used a lot in advertising. We understand as lawyers that that doesn't mean that that's the contract price and that's it. But I think sometimes that can be confusing and people think, oh, I'm paying$400,000 for this product, but don't understand that, um, or, or haven't turned their mind to the fact that tiles can sometimes cost more mm-hmm.<affirmative>, or you might not want that tile anymore, you might want something different. Or that vanity doesn't quite look right, you wanna upgrade a little bit. Those are all things that can suddenly start to really, really add up. So I, I think the term fixed price contract, um, really could do with a little bit more explanation. A a and that's, we'll go into that again in a, in another couple of episodes cuz I think that's something that there needs to be a bit more education about. And, and really what does that actually mean?
Speaker 3:What does that mean?
Speaker 1:Yeah. And it, and that's a budget consideration as well, I think.
Speaker 3:Yeah. Yeah. So if your budget is 70,000 and your contract is 70,000, your fixed price contract is 70,000, you know, you just really want to be clear that the project's probably not gonna be 70,000. That's
Speaker 1:Right. And there are some risks and your reality test those or scenario test
Speaker 3:Them as scenario, test them. Reality test them. Think that, think those scenarios
Speaker 1:Through. Yeah. And can I just say, and I, I guess wrapping up, we're not suggesting listeners that you shouldn't renovate or you shouldn't build cuz it's really scary and it's gonna go straight down the toilet. That's not what we're saying at all. No, these projects are exciting. They can be really successful. We're just suggesting that you take a pause, do your homework, think about these things before you sign on the dotted line, um, and possibly even consider getting some advice, which we'll talk about in. We'll talk about that in the next episode. Be excited, be informed. Yes. Be educated. Yeah. Be cautiously excited, cautiously excited.<laugh>, perhaps the same as you were feeling before this first podcast. Yes.<laugh>. Exactly. Exactly. But Kelly, guess what? You've made it. Have I made it true to my first episode? You made it through the first episode. Oh my goodness. Time goes fast when you're having fun. Hey. It goes really fast when you're having fun. Awesome. Well thank you for joining me. You'll be here for episode two. I will, uh, where we will be touching on the contract and some tips and pitfalls is where we get to do the lawyering. Yes. So we get, get into it a little bit more.<laugh>. Okay. Awesome. And thanks everyone. We'll um, see you on our next episode of Owners Hour. Thank you. Bye.