Construction Inspections: How to Build your portfolio on solid foundations - Malpass Finance

Construction Inspections: How to Build your portfolio on solid foundations

0 Flares Twitter 0 Facebook 0 Filament.io 0 Flares ×

Homebuyers can get themselves into serious trouble if they forget to cover their ass(ets) when making an offer on a house. But there are simple things you can do to protect yourself from unwelcome extra costs.

Whether you're buying established, building new or renovating your home, it's easy to get carried away with getting the deal done, or the project moving, and overlook an important step in the process which, for the sake of a few hundred dollars, could save yourself tens of thousands in unexpected repairs.

In this two-part series, we look at the services that put the power back in the hands of the buyer to make informed decisions, even if they’ve never bought or built a home before.

I spoke to Dave Waters, an experienced builder who now runs his own building inspections franchise through Jim’s Building Inspections. His experience in the industry is extensive, with more than 30 years in various building professions including estimating, contract management, site supervision, and small-scale residential and commercial property development and renovations projects and maintenance.

So, last time, we discussed the importance of ensuring buyers have a current and detailed building inspection report done prior to settlement.

This post is all about making sure that your interests are protected when building your new home or investment property:

Part 2: Building your new home or rental property

Often the people signing up to build a new home know very little about the building process, the materials being used or the building standards before signing on to make one of the biggest investments of their lives. That can make things tricky when it comes to hand-over and things aren't as they were envisaged at the start.

Most, if not all, building companies require progress payments towards the total contracted amount: slab, frame, roof and handover, so it makes sense to check that you are getting what you've paid for at each stage too. It's also cheaper and easier to fix problems identified at each stage, and before the next phase of building - ie repositioning a drain before the bathroom is tiled, or moving a wall before the roof goes on.

Whether your bank is paying the progress payments on your behalf, or you have the cash to manage that yourself, it's a good idea to have a knowledgeable and experienced inspector take a look at the work the builder wants to be paid for.

It's also a good idea to have someone look over your contract before you sign it - as many of the terms used are industry specific and sometimes mean something slightly different from what a lay person would expect.

Never assume anything is included in the price, or will be done unless it is expressly included in your terms and costings.

Communication between building companies and their clients is the number one cause of dissatisfaction and disputes when building. Sometimes the outcome is far from the expectation and unfortunately, if what the client wanted wasn't written down at the start in the contract, then it's not part of the deal.

So while you may feel you're being picky about ensuring certain things are written into your contract, the end result is more likely to be what you wanted, without the confusion and nasty or costly surprises along the way.

So how can first-time home builders be sure they understand how the building process works?

The building process can be quite overwhelming for people who haven't done it before, and it's easy to forget things or not know what to ask for when choosing your builder and the design of your new home.

One of the services I offer is contracts documentation review. This is where I assist new build clients by going over their documentation to make suggestions for clarification with the building company and answering questions my clients may have.

What are Staged Construction Inspections?

Staged Construction Inspections are reports conducted at each stage of the building process to coincide with each progress payment: i.e. Slab, Frame, Roof and Handover.

At these inspections I check what work has been done to date and can categorise the work as being non-compliant, substandard workmanship, incomplete or on occasion, I note items for the information of my client so they are aware of certain issues. I provide a copy of the checklist that I have completed on site and a report completed in accordance with the Australian Standard with photos alongside any relevant item. I refer to the National Construction Code, Australian Standards and the Guide to Standards and Tolerances where applicable.

Construction Inspections Non-Compliant Brickwork

Construction Inspections Non-Compliant Brickwork

As an example of the type of thing that an experienced inspector can look out for,
during the course of a brickwork inspection, I noted a number of unused galvanised reinforcement rods left on the ground at the site. My suspicions were later confirmed when checking over a T-bar lintel supporting some brickwork, the engineer had specified that four rods were to be used to reinforce the brickwork, but only one was installed onsite. This may have caused potential failure or significant bowing of the T-bar lintel at a later date. Had the damage occurred outside the builders' warranty period then the owner would have had a large repair bill to be able to sell the property on.

Construction Inspections Non-Compliant Tiling

Construction Inspections Non-Compliant Tiling

Rectifying problems with floor tiling can be tricky because removal and replacement is a very costly process, running into thousands of dollars in some cases.

It's hard to tell from the adjacent bathroom floor photo, but this section of tiling was non-compliant, and there were other issues evident in this bathroom that lead to my report being used by the owners as evidence in a submission to the Building Commission for a ruling on who needed to pay to rectify the issues for acceptable standards of work. Here I used a digital spirit level to gauge the drainage run.

An inexperienced person might not have noticed the poor workmanship of this bathroom tiling and accepted the home as it was at the handover stage. This would have led to serious problems with the tiling and drainage of the bathroom.

On inspection, there was evidence of poor grouting between the tiles, with pinholes in the grout which would have allowed water to soak in between the tiles to the walls, floor and grouting behind.

Water was collecting next to a half height wall next to the shower recess and seeping in behind several tiles, which could be seen as they were changing colour partially. This was evidence that the tiles were coming away from the wall behind them.

There were also areas where water was collecting against the vanity cupboards, this can lead to the chipboard kick rail becoming saturated and delaminating.

And the lack of drainage with water sitting on the surface for long periods of time can damage the grout and can also be a slip hazard.

Disputes of this type often handled between the Builder and the Client. If done early in the process the Report normally has the desired effect of having the Builder attend to the issue.

I can also do specific Practical Completion Inspections where I attend the handover meeting. Similarly, I also provide a report completed in accordance with the Australian Standard with photos alongside any relevant item.

Some people may want some extra assistance with their building project, whether they are short on time or know they need an experienced builder on their side of negotiations with the building company and they can request Project Management services, or if they are building the property themselves I offer Owner Builder Advisory Services.

Last week Part 1: Buying or Renovating Existing Buildings

 

It's rare for such complicated projects as building houses to happen without the need for checking things are done as they were agreed, so it's a great idea to have your team in place before you set your heart on the design and sign the contract to build.

There are some great building companies out there that take pride in their work and build beautiful homes. But, like every company, they are run by humans and rely on humans to do the work and everyone makes mistakes from time to time. Most builders will fix issues if they know about them with little fuss and bother, but if you don't know what you're looking for, then it's best to have someone check who does.

If you'd like help with assessing your personal and financial situation, as well as comparing the loans in the market to see if you're truly getting the right deal for you, then call Bob Malpass now on 0431 862 136, email [email protected] or send us a message via our website for a quick response.

Thanks for reading,

Bob

For the latest finance and property information receive our monthly updates delivered directly to your inbox.
As a thank you for visiting our website enter our fantastic competition for your chance to win.
Disclaimer
The advice provided on this website is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. If any products are detailed on this website, you should obtain a Product Disclosure Statement relating to the products and consider its contents before making any decisions. Where quoted, past performance is not indicative of future performance.
Malpass Finance Pty Ltd disclaim all and any guarantees, undertakings and warranties, expressed or implied, and shall not be liable for any loss or damage whatsoever (including human or computer error, negligent or otherwise, or incidental or consequential loss or damage) arising out of or in connection with any use or reliance on the information or advice on this site. The user must accept sole responsibility associated with the use of the material on this site, irrespective of the purpose for which such use or results are applied. The information on this website is no substitute for qualified financial advice.
0 Flares Twitter 0 Facebook 0 Filament.io 0 Flares ×