Supervision only anyone?
Posted on September 10, 2018
You may be asked to be supervisor for a job. You might think this is a way to earn some easy money but before you jump in, consider the risks.
A supervisor has a duty of care to properly supervise the work of others. That means regular visits to the site and careful checking of the trades’ work at appropriate times. Each job will be different but you will need to be able to satisfy yourself that the work is compliant and proper and that you have checked it before it is covered up by the other trades. You should also make sure each trade has the appropriate licence.
Under the supervision only model, the owner will engage each trade and will also buy the materials from suppliers. Make sure that is what happens and that you are not convinced to engage trades and buy materials yourself. If you are not careful you might end up owing money to trades and suppliers.
Any trade that is contracted direct by an owner to do building work (where the value of the work is more than $12,000 or the work requires Development Act approval) must take out indemnity insurance.
As supervisor, you will also need indemnity insurance and you are legally obliged to get it. Make sure you do that. Your indemnity insurance does not cover the trades on the job.
You should make sure that the owner is fully aware that each trade they engage must have this insurance (where the value of the work is more than $12,000 or the work requires Development Act approval). If they don’t, the tradesperson will be breaking the law but more importantly (for you) the owner or a subsequent owner might come after you if something goes wrong.
Realistically many trades are not set up to get indemnity insurance. This is a real barrier to many owner builders. If an owner asks you to supervise the construction of their house, you should make sure that the owner understands that indemnity insurance for all trades is something they need to get. If you just leave it to the owner to work that out for themselves, they will probably come after you down the track if there is a problem. Getting this sort of advice to the owner in writing is vital in case things go wrong down the track.
If you are not confident that indemnity insurance is in place you should reconsider the supervision only model and talk to the owner about another form of contracting – like a fixed price building contract. However under that model you will be responsible for hiring, firing and paying the trades and suppliers and you will be liable for all defects in the work even if you don’t do that work yourself.
If you are being asked to simply sign a council Certificate of Compliance and you are not supervising the work, you should say no. Certifying that something has been built properly and according to the approval when you have not supervised that work and checked to make sure that is correct is plain stupid and very risky.
Supervision only is often seen by owners as a cheaper alternative to a building contract but realistically that is not the case. There are risks associated with operating under this model and you need to be aware of those risks before you say yes.
If you need a form of supervision only contract, give us a call. We offer supervision only contracts, with a fast turnaround, for only $100 + GST.
