CONSUMING MATTERS

March 2002

PRODUCED BY

THE CONSUMER AND TENANT RESOURCE CENTRE OUTER EAST

FUNDED BY THE CONSUMER AND BUSINESS AFFAIRS VICTORIA

TIPS FOR DOMESTIC BULDING CONTRACTS

Building a home is one of the most expensive transactions you can enter into. It can also be one of the most frustrating. The following tips are designed to minimize the potential problems.

A major domestic building contract is a legally binding document between a consumer and builder and applies to building work worth more than $5000. Make sure the builder is registered with the Building Practitioners Board (1300 360320). If they are not registered, there will be no statutory insurance cover.

Seek as much advice about the contract as possible, before signing. Choose a solicitor or building consultant with building expertise. Try to ensure set commencement and completion dates are written into the contract. All your building requirements should be reflected in the plans and specifications which are attached to and form part of the contract. Variations to the contract may be necessary if you change your mind or if the builder finds unforeseen problems. Any variation must be in writing and signed by both parties. Variations may impact on the price and completion date.

There are implied warranties contained in the building legislation re standards of workmanship, material used, adherence to all relevant laws and completion within the stated time frame. There is a 5 day cooling-off period to withdraw from the agreement. The builder must be informed of the withdrawal in writing. The cooling-off period does not apply if you obtained independent legal advice before signing. A deposit cannot exceed 5% if the contract price is $20,000 or more, or 10% if the price is less than $20,000. There are also maximum progress payments allowable at each stage of the building work.

A builder cannot demand the final payment unless the work is completed according to the plans and specifications drawn up in the contract and you are given a copy of the Occupancy Certificate or Certificate of Final Inspection. If you pay before completion you may not be able to claim on the insurance if there are defects that are not rectified.

CONDITION REPORTS

When a bond is paid by a tenant, the landlord must give 2 copies of a condition report before the tenant enters into occupation of the premises. The condition report should state the general condition and state of repair of the property at the date of possession.

The tenant must check the actual condition of the property against the condition report provided and can make notes on the report stating any problems e.g. stains on carpets, marks on walls etc. We encourage tenants to inspect their property carefully and if there is insufficient space, the tenant can write "see attached" and attach a separate sheet. The condition report must be signed and returned within 3 business days of taking possession of the property.

The condition report is regarded as conclusive evidence as to the state of repair of the property. Tenants are reminded that at the end of their tenancy this report will help determine if there are damage or cleaning costs for which they are liable.

HOW TO AVOID EVICTION

February/March can be a difficult time for families to find all the rent that may be due. What with children going back to school, there are school uniforms, books and fees to be paid, let alone recovering from the credit card bills from Christmas and all the regular bills. We often get calls of distress from tenants who have not paid their rent because they didn't have the full amount that was due - typically one month's rent. Some Estate Agents or Landlords will not accept anything less than a full months rent.

Don't get caught in a situation where your part rent gets spent on other pressing bills because the Estate Agent or Landlord indicated they would only accept the full amount. It is far better to pay some rent rather than no rent. Estate Agents and Landlords cannot refuse to accept part payments of rent. It is suggested that you try and make your payments equal to 1 or 2 weeks rent at a time. It is easier to keep track of when your rent is paid up to. The aim is to never get more than 14 days in arrears. Once this has occurred the Landlord or Estate Agent can serve a 14 day Notice to Vacate.

Always keep your Landlord or Estate Agent informed if you are having difficulty paying the rent and what you plan to do about it. If that means only paying 2 weeks rent at a time instead of a month, until you have got back on track with your budget, then do so. If a part payment is refused, then send the money to them in the form of a Money Order or cheque by registered post. The rent will then be deemed to be paid and you will have proof of sending it. A 14 day Notice to Vacate cannot be served if you are less than 14 days in arrears, even if the Estate Agent logs this payment as 'on account' because it is a part payment of rent.

For more information and strategies on how to avoid eviction due to rent arrears contact us on 9761 0288.

BUYING ON-LINE

There can be problems purchasing products on the Internet. You don't really know whom you are dealing with. You don't know if the company you are dealing with is in Victoria, Australia or from some other country that doesn't have the same consumer laws that we do here. Consumers need to read the conditions of the sale, they need to have an address and phone number so that they are able to know who to contact if the goods they receive are not of merchantable quality, don't match the description, if they have any defects or not fit for the purpose.

Consumer & Business Affairs are checking websites to ensure they provide sufficient information for on-line sales, and if a breach is identified they have 14 days to comply with the requirements of the Fair Trading Act. There is also the problem of giving your credit card number to a Company that you know nothing about. What if the goods are not sent? What can the Consumer do when they receive their credit card statement and on it is a transaction for goods that were never received? If your credit card is with a Bank or similar Institution you need to go into a branch and fill in a Disputed Transaction Form. We can't stress enough the importance of being wary of contracting over the net. Take the time to read the conditions of sale, know whom you are dealing with and where they are.

For more information regarding on-line buying, go to www.netaltert.net.au. and they will give you hints of things to look out for and you can give us a ring on 9761 0288