Owner builder obligations

Jean asks:

My son and I intend to build a house together in Victoria. Obviously we would have to employ some contractors to do some of this work, but we intend to do most things ourselves. 

Could you recommend any back articles, or any other publications, on our legal obligations, particularly in regard to OH&S. From what I understand, most OH&S regulations relate to employers’ obligations, and I don’t think I or my son would be classified as employers or employees.

Is this right? I would appreciate any help you can offer in this regard.

It may be worth reading the owner builder regulations article for your state (on our website www.theownerbuilder.com.au, under Extracts).

In Victoria: Contact the Building Commission for more details (1300 360 320, www.buildingcommission.com.au). Their Owner Builder section on the website is very useful:


The Owner builder Application Kit (to the right of the page) also has a lot of relevant info, and you will need it to obtain your OB Certificate of Consent.

Your council is always a good source of information.

Basically as an owner builder, you are taking on all the responsibility that a professional builder would.

1.  Sub contractors

Any sub contractor you employ should
a) hold a licence for the work they will be performing from you
b) should have their own PL insurance – This will provide cover in case anyone is injured due to his actions, i.e. falling over his toolbox and breaking a leg.
c) have their own Workers Compensation policy – else they need to be treated as an employee / labourer and you need to provide Workers Comp.

You should have a contract with the contractor.  In NSW, any work over $12,000 requires the contractor to provide Home Warranty Insurance. This may provide some protection against faulty workmanship.

But remember, that as an owner builder you are in fact the project manager / building supervisor and therefore ultimately responsible.  If you think something is not being done right, speak up.

2.  Insurance – your own

You then also need your own public liability insurance to cover the sub contractor, or anyone else, falling over your toolbox!

You should also think about insurance against damage or theft of materials during the building process.

If you sell your house in less than 6 years (in NSW) you also have to provide Home Warranty insurance for the new buyers.  That only needs to be purchased if and when you sell.

3.  Labourers

If you employ anyone as a labourer rather than a subbie, then you have to treat them as an employee and you need to think about Workers Compensation as well as other employee benefits.


  1. Best thing to do is use a service like http://ownerbuildertexas.com. They will walk you through the process of building your custom home, from site preparation through completion. They will show you how to obtain a detailed budget estimate, provide competitive rate financing and a list of suppliers. They network for you to get great discounted rates on suppliers and contractors to help you be your own builder and build your very own dream home!

  2. While it may seem a little pedantic at first, it’s actually really important to note that, unlike registered builders (who are themselves engaged under a contract), an owner-builder engages ‘contractors’, not ‘sub-contractors’.
    Some legislative requirements don’t make sense unless you have that distinction clear first.

    On point 1(c), it’s vital to note that you absolutely cannot rely on your contractors having their own Workers Compensation. This is not to say that they won’t in most cases, but even if you obtain evidence (a certificate of insurance), showing that they hold a Workers Comp policy is only a small part of the problem.
    If the contractor is not a “Pty Ltd” company (or, applicable only to NSW, a Plumber or Electrician) then having a workers comp policy only provides covers for workers, not the Contractor himself. A sole trader cannot cover themself for Workers Comp under any circumstance other than the special exception noted above. This is where a claim is usually made against the builder.

    Good news regarding point 2. You can’t get Public Liability insurance without also getting the material cover. It’s only available (even to registered builders) as the combined policy.
    It’s common for owner-builders (or renovators at least) however to confuse the public liability risk that forms part of an owner-builder project with the public liablity insurance held under other unrelated insurances, like Home/Contents (which always exclude liability arising from construction works).

    Mark Adams
    Owner-Builder Insurance Expert

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