Building

Contributed by Victoria Tummer, as amended by BAS and current to May 2025

Legislative scheme

In the NT, building work is regulated primarily by the following Acts:

• Architects Act 1963 (NT)
• Building Act 1993 (NT)
• Construction Contracts (Security of Payments) Act 2004 (NT)
• Electrical Workers and Contractors Act 1978 (NT)
• Encroachment of Buildings Act 1982 (NT)
• Planning Act 1999 (NT)
• Plumbers and Drainers Licensing Act 1983 (NT)
• Construction Industry Long Service Leave and Benefits Act 2005 (NT)

The common law of contract, the Consumer Affairs and Fair Trading Act 1990 (NT) and the Competition and Consumer Act 2010 (Cth) also apply (see Contracts and Consumer Protection ).

All building work must comply with the Building Act 1993 (NT), Building Regulations 1993 (NT), and the National Construction Code (NCC), which is comprised of the Building Code of Australia and the Plumbing Code of Australia. The NCC establishes standards for materials and work, site requirements, construction methods, excavation, earthwork and other building matters. The NCC sets out recognised Australian standards for buildings and takes into account the NT's climate and exposure to cyclones.

Significant changes to the Building Act 1993 (NT)and the legislative framework regulating residential building work commenced operation in 2013. The aim of these reforms was to provide additional consumer protections and increase confidence in the NT building industry by:

• strengthening the financial and asset requirements for builders to obtain and maintain registration;
• setting prescribed progress payment stages to reduce instances where progress payments made to builders far exceed the value of work actually completed;
• providing for statutory consumer guarantees;
• removing the Home Building Certification Fund and replacing it with compulsory residential building cover that can be accessed by consumers for incomplete or non-compliant work where the builder has died, disappeared, become bankrupt or insolvent, or where the builder's registration has ceased in certain circumstances; and
• providing for a statutory dispute resolution process where protection under the residential building cover scheme has not been triggered.

The construction industry is an important and challenging industry to regulate and reform. The various stakeholders involved can often have very different interests in policy outcomes and consumers can face significant financial losses if their builder fails. Although these reforms went some way in addressing some of those issues in the building industry, there have been concerns about the increased paperwork, duplicated processes and associated costs with the new system. The NT Government has recently commissioned a report to review and make recommendations on the current regulatory framework, known as the Cureton Review. This is currently under consideration, which may follow with even further reform, particularly relating to the residential building cover scheme.

The building process

The Building and Renovating in the NT – Consumer Guide outlines the choices and processes that consumers need to be familiar with when building or renovating a stand-alone home, or a detached single dwelling. The Guide and checklist can be accessed through chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://nt.gov.au/__data/assets/pdf_file/0005/232484/building-and-renovating-nt-consumer-guide.pdf.

The first step of the process is to prepare drawings of the proposed work and obtain a building permit for the work from a building certifier. In the process of building or renovating, a person may work with a variety of trades people and professionals, including an engineer, draughtsperson or architect, a building certifier, builders, plumbers and government officials. Many people go about proceeding with the building job differently. Some of the options include:

• hiring a builder who hires all the subcontractors, including the architect/draftsperson
• hiring an architect who finds the builder and supervises the building work
• hiring the subcontractors directly, including the architect or draftsperson (basically building the house yourself).

If the owner of land wants to manage the building or renovation of a house on the land themselves, then the owner needs to obtain an Owner-Builder certificate, which is issued for three years and can be renewed for another three years. Owner-builders cannot be companies or trusts and are limited to building on one block of land every six years. Owner-builder application forms are available from the Registrar of the Building Practitioners Board or can be downloaded from the Building Practitioner's Board website at http://www.bpb.nt.gov.au/forms.shtml. Owner-builders must read the Owner-builder Manual before making an application as there are significant risks and legal responsibilities associated with an owner-builder. Anyone considering becoming an owner-builder should be confident they have the time and skills required, and even consider obtaining professional advice. Owner-builders are required to comply with most of the obligations of a building practitioner, including the requirement to obtain residential building cover prior to construction works starting. This cover will also protect any subsequent owners from structural defects for a period of six years.

Registration

Residential builders undertaking prescribed building works must be registered as one of the following five types of building practitioners:

• building certifier;
• certifying architect;
• certifying plumber and drainer;
• certifying engineer; or
• building contractor (restricted or unrestricted).

A building contractor (restricted) can only carry out building work for single dwellings, townhouses and residential units of not more than two storeys. A building contractor (unrestricted) can do all single dwellings, townhouses and residential units of any height.

Prescribed building works must be performed by either a registered building contractor or a certified owner-builder. Prescribed building works include works over the cost of $12,000 to build any of the following:

• a class 1a building, for example a single dwelling, a detached house or attached townhouses or duplexes
• a class 2 building, for example attached residential units or flats
• extensions and renovations to class 1a or class 2 buildings where the floor area is increased
• a class 10 building, for example a garage, carport or shed – attached to and built at the same time as a class 1a or class 2 building
• a retaining wall – whenever built – that is not attached to a class 1a or class 2 building but on which the integrity of such a building depends
• the relocation of an existing building.

Where only renovations or alterations to existing buildings are required, like re-roofing and refurbishing bathrooms, or the entire building works are less than $12,000, there is no requirement for a builder to be registered nor is there a requirement for residential building cover.

Applications for registration for building practitioners can be downloaded from the Building Practitioners Board website at https://www.bpb.nt.gov.au/registration. The Building Practitioners Board must register an applicant if it is satisfied that the applicant:

• is a fit and proper person;
• has the relevant qualifications and experience;
• has net financial assets of at least $50,000, which must be maintained for the whole period of registration; and
• for building contractors and certifying plumber and drainers, holds a professional indemnity insurance policy.

Points to remember

• A person who intends to engage a builder or contractor should check that they are registered. The Register of Building Practitioners is available at https://www.ntlis.nt.gov.au/building-practitioners// where you can check the registration status of any particular practitioner or locate registered practitioners within a particular area.
• Owner-builders do not need to register but do need to obtain an Owner-Builder certificate for any building work on the land which they own. The owner-builder may also be required to undertake a course.

NT Building Control areas and the role of local government

The NT has a two-tier building control area system recognising the distances and costs involved in engaging building practitioner, and for which the Building Act 1993 (NT) applies. Where your property is located will determine what building requirements (if any) you will require, if residential building insurance is applicable and the standard of building work to meet the National Construction Code (NCC) and Building Regulations 1993 (NT).

Non-building control areas may include Freehold land, most Indigenous communities, pastoral properties, some mining towns, mining sites and resorts in remote locations. You don’t need to engage a registered builder outside of a building control area, but you may do so and it is still recommended that you engaged registered building practitioners who will agree to carry out building works in accordance with the NCC. Funding, grants loans or land leases may have conditions written into the building contract that the building is to be built to the NCC or by a registered builder.

Further information regarding requirements in building control areas can be accessed through https://nt.gov.au/property/building/build-in-a-controlled-area/building-control-areas/requirements-in-building-control-areas.

NT Government, through the Building Advisory Services branch of the Department of Lands, Planning and Environment does all the following:

• administers the building control laws including the Building Act 1993 (NT) and Building Regulations 1993 (NT)
• gives advice and information about technical standards and building control laws
• makes sure that building certifiers and other building practitioners are complying with building control laws - this is done through audits as well as investigating complaints
• keeps records of building certification documents.

Building certifiers

In the NT, building certification is done by registered private building certifiers. Building certifiers (known as building surveyors in some parts of Australia) are highly skilled professionals who need to meet strict registration requirements before being able to work and charge a fee for their service. You must use a building certifier for building works that require a building permit and only one building certifier can be appointed to a building project.

A building certifier’s role includes:

• assessing building permit applications against law and technical standards
• granting building permits
• doing site inspections of buildings and building work
• issuing occupancy certification when the work is finished and meets the standards and laws.

Building certifiers must be independent from your builder. You should make sure you:

• understand how and when the building certifier is going to be paid
• check that the building certifier’s registration is current.

Building certifiers also have an enforcement role and if needed can:

• issue building notices and building orders – including orders to evacuate, stop building work, or comply with other directions
• issue directions to ensure building works are carried out with the relevant approvals and in accordance with relevant laws.

A building certifier is not a site supervisor. Their inspections do not replace day-to-day supervision of the work. You should talk to your building certifier about other services they might offer. Some certifiers can:

• arrange for plans to be drawn for your project
• help you to arrange engineering services
• make other applications for you, for example development applications under planning laws.

The public Register of Building Practitioners also includes a list of registered building certifiers and can be accessed at https://www.ntlis.nt.gov.au/building-practitioners// or by contacting the Building Practitioners Board on telephone number on 1800 193 111.

Building permits

Before any work starts, and before applying for a building permit, you may need to obtain a development permit from the Development Consent Authority to comply with the Planning Act 1999. The Planning Act 1999 regulates the use and development of land. It particularly examines the impact of the proposed development or use on the surrounding area, whereas the Building Act 1993 (NT) focuses on the proposed building work.

Before a person can construct, alter, relocate or demolish a building or part of a building, the owner of the building or the owners agent, must obtain a building permit from a registered building certifier.

Part 6 of the Building Act 1993 (NT) states that anyone (including owner-builders) intending to undertake building work must obtain a building permit from a building certifier in respect of that work before starting the building work. To continue building work without a valid building permit is an offence and it may impact on the fidelity cover.

You must engage an NT registered building certifier to issue a building permit before starting work.

You will need to give your building certifier a completed ‘Application for building permit’ and detail:

• details of the proposed structure (including drawings)
• structural engineer’s certification for structural design
• certified plumbing design (for any plumbing work)
• a statement describing the purpose of the building
• proof that the relevant insurance/fidelity certificate has been obtained (if applicable)
• any relevant planning consents and approval (if applicable)
• owner-builder certificate (if applicable)
• details of the registered building by providing evidence of a building contract (if applicable). Your building certifier will assess your application for a building permit to make sure that the proposed work complies with the Building Act 1993 (NT), Building Regulations 1993 (NT) and NCC. The NCC covers issues such as structural safety, and health and fire protection, but does not address the quality of the work or finish.

Your building certifier will issue a building permit, which is valid for two years from the date of issue. This period can be extended by applying to your building certifier before the expiry date.

The permit will state what stages inspections will need to occur. Amendments/variations to the approved design must be approved by the building certifier before any work commences. If changes need to be made to your build you may need an amendment to your building permit before the building works commence.

The Building Regulations 1993 (NT) provide for mandatory inspection stages at which the builder must notify the certifier upon completion of each of those stages of the works. Building cannot continue to the next stage until the certifier has inspected the works and authorised the builder to proceed. The inspection stages are:

1. Pre-pour - before pouring footings or ground floor slab or other in situ concrete.
2. Frame - before covering the framework for floors, walls, roof or other building.
3. Block wall - before pouring reinforced masonry or block walls.
4. Fire separation (duplex/units) - before covering walls, floors or ceilings, for the purpose of checking that fire resistance levels comply with the Building Code.
5. Wet area - before covering waterproofing in wet areas.
6. Final inspection – After completing the building work but before issuing an occupancy permit in relation to the work.

Occupancy certification

Occupancy certification is a document that shows the building certifier or Director of Building Control is satisfied and has approved your building as being suitable for occupation, noting that a building must not be occupied until occupancy certification has been granted by the building certifier or Director of Building Control.

On completion of the building work, the builder and plumber and drainer (if applicable) must sign a declaration stating that the building works have been carried out in accordance with the permit. This must be given to your building certifier before occupancy certification is granted.

There are three different levels of occupancy certification in the NT building certification system:

• Occupancy permit – is the highest level of occupancy certification that may be granted by a building certifier, to show the work constructed fully complies with the requirements of the building permit, the Building Act 1993 (NT) and the Building Regulations 1993 (NT) and the technical standards and codes that applied at the time of the building permit.
• Certificate of substantial compliance – may be granted by a building certifier where building work occurs under a valid permit and meets the technical standards and codes that applied at the time the building permit was granted, but with minor departures from the legislated construction and certification processes.
• Certificate of existence – may be granted by the Director of Building Control for building works completed before 1 May 2016 that were unapproved or achieved less than substantial compliance or did not meet the relevant technical standards, but only on recommendation by a building certifier that the building is suitable for occupancy as it complies with a reasonable level of safety, health and amenity.

When the building is constructed in compliance with the building permit and approved plans, you or your agent must apply to the building certifier for occupancy certification. The building certifier will tell you what documents need to be lodged with your application. For example, you may need to obtain certificates from tradesmen on the project, for building work such as:

• glazing
• electrical
• termite treatment
• prefabricated roof trusses
• wet area sealing products
• prefabricated window and door frames
• fire safety products or installations.

Insurance

As a result of the 2013 reforms, the Master Builders Association operates a fidelity fund which provides residential building cover to owners where a trigger event has occurred. Trigger events include the builder's death or disappearance, insolvency or bankruptcy, or loss of registration.

Unlike the previous Home Warranty Insurance scheme, the current residential building cover includes cover for both non-completion and non-compliance. Non-completion coverage means that an owner will be covered under this scheme to engage a new builder to complete the works, where a trigger event occurs prior to the completion of construction. Coverage for non-compliance means that the owner will be covered for defects that become apparent within the consumer guarantee period, provided a trigger event has occurred. Benefits provided through the fidelity fund are capped at 20% of the contract price up to a maximum of $200,000.

Although the residential building cover scheme only applies where a trigger event has occurred, the legislation also provides for avenues to address owner dissatisfaction where the builder is still solvent and registered. Where an owner alleges a contravention of a statutory consumer guarantee (see section Consumer guarantee disputes) or disputes the standard of workmanship, the dispute may be able to be referred to the Commissioner of Residential Building Disputes. If an owner considers the builder has committed an offence under the Building Act 1993 (NT)or associated Regulations, has been negligent or incompetent, or is otherwise guilty of professional misconduct, the owner can make a written complaint to the Director of Building Control. More information on this can be found in the section titled Disputes.

Display homes

Many project builders use finished display homes to show some of their house designs, these can help you see and understand the different options that are available. This allows you to see the features of the home as a finished product, but it is important to realise that some of the fittings and design features may not be included in the standard version of the home.

It is important to find out exactly what you will get if you decide to contract with the builder. Remember to check the contract and specifications and be aware some of the following items will NOT normally be included in your contract, even though they may be seen in the display home:

• loose furniture
• security systems
• floor coverings
• dishwashers, washing machines and loose electrical appliances
• curtains, blinds, light shades, wallpaper and fixed mirrors
• garages/carports
• security and fly screens
• concrete or tiled floors under the entry porch or verandah
• driveways, paths, landscaping and gardens
• garden sheds, and outdoor furniture
• fences
• pergolas
• letterbox
• clothesline
• pools and spas.

The person who selects the model based on what they saw in a display home might find themselves either disappointed with the final product or considerably out of pocket, because they will have to pay for all the extras excluded from the contract.

The standard price of the home will usually only allow for a limited choice of building materials. Check if other building materials are available and if they will cost more. The price of a display home is also usually based on construction on a fairly flat block with a stable soil type and little or no underground rock. It may cost a lot more if you have a steep slope, unstable soil or rock beneath the surface.

Building contracts

A written contract is required where a building contractor (restricted or unrestricted) is hired to carry out prescribed building work. While the terms of building contracts are generally negotiable, the Building Act 1993 (NT) and Building Regulations 1993 (NT) specify certain things which must be included in the contract. It would be a good idea to seek legal advice in this respect.

If the building work is less than $12,000 or the building contractor is the owner builder, a written contract is not required. In respect of small jobs, some builders will prefer to provide a quotation. Once a quotation is agreed to, either verbally or in writing, a contract exists. The absence of a written contract simply means that its terms and conditions are to be implied from general principles of contract law and construction practice (see Contracts and consumer protection ) and now, by the Security of Payment (SOP) legislation (see When a builder has not paid subcontractors below). Such contracts can produce difficulties as builders, who are more familiar with general industry practices, generally have the upper hand in dealings with inexperienced homeowners. For this reason, the terms of any contract should be requested in writing. Some written building quotes have terms and conditions contained on the reverse side of the document where they are can easily be overlooked.

A person who agrees to a quotation without first reading its conditions is still deemed to have accepted its terms and conditions and is legally bound by it. The time spent understanding specific conditions and specifications before accepting a quotation is time well spent.

Types of building contracts

A residential building contract is a binding legal document. It details how you and your builder will share rights and responsibilities. Before you sign a contract, make sure you understand the conditions of the contract. If you are unsure about a contract, get legal advice BEFORE you sign it. Check the contract includes all of the following which are required under Building Regulations 1993 (NT):

• the building work to be carried out on a single project
• the building contractor’s details and registration number
• the extent and value of the work and the contracted price
• the applicable building standard of work, if higher that the NCC
• the schedule of progress payments
• a provision about dispute resolution
• the consumer guarantees required by the Building Act 1993 (NT).

The Building Regulations 1993 (NT) require all residential building contracts to specify a total contract price. As such, building contracts which provide for the builder to recover their actual costs plus a margin (a cost-plus contract) are now prohibited. However, the total contracted price can still vary due to variations in plans, provisional sums or prime cost items. These are items that may be difficult to accurately estimate when the contract is first entered into, as they are provisional on a decision that cannot be made until construction is under way and by then the cost of items are likely to have changed. For example, where tiles are to be used in the construction of a house, the owners usually do not decide on the exact tile to be used until well into construction. Owners should carefully read their building contracts to ensure they understand how the total contract price can be affected.

A contract may also contain clauses that allow the principal or builder to terminate it if its terms are not met. For instance, a contract could contain a clause permitting the builder to terminate if the principal defaults on paying the builder within a specified time. Alternatively, a contract could contain a clause permitting the owner to terminate if the builder fails to progress with work at a satisfactory rate. Before signing a contract, it is wise to review termination clauses carefully.

Termination clauses generally include notice requirements. For example, a Notice of Default may need to be served on the party who is in default, giving them a specified period such as 14 days to remedy it. If the first notice is ignored, a second one may need to be served before the contract can be terminated. If a party is in default and the innocent party follows the termination procedure set out in the contract, the defaulting party will be liable for damages and an action may also be taken under common law or according to the Competition and Consumer Act 2010 (Cth) or the Consumer Affairs and Fair Trading Act 1990 (NT) (see Contracts and consumer protection ).

Many building contracts are based on standard form contracts, such as those contracts available through Master Builders Association NT or the Housing Industry Association. For those owners seeking to secure finance, it is worth noting that many lending bodies prefer a standard form contract.

Remember under a residential building contract a builder must not:

• commence work or demand or receive any payment under the contract without having Residential Building Cover in place and providing you with a copy of the fidelity certificate
• request or receive a progress payment as specified in or under the contract until after completion of the stage of work to which the progress payment relates.

Relevant Acts

Like any contract for goods and services, a building contract is subject to the terms of the Competition and Consumer Act 2010 (Cth) and the Consumer Affairs and Fair Trading Act 1990 (NT). Consumer protection provisions and remedies for breach of contract may be available under either piece of legislation (see Contracts and consumer protection). Remedies may also be available under common law. A person who suspects their builder may have breached their contract should obtain legal advice as soon as possible.

The Security of Payment (SOP) legislation now applies to both residential and commercial construction contracts. The SOP legislation was introduced to ensure that contractors carrying out building or construction work get paid in a timely manner. For a more detailed overview of the SOP legislation, see When a builder has not paid subcontractors.

The rules regulating the relationship between the parties to a contract are, with a few exceptions, contained within the document itself. Therefore, signing a building contract ought not to be undertaken lightly. The document should be fully read and thoroughly understood to avoid future misunderstandings. The builder, architect or other consultant undertaking the work will usually draft the contract or provide their standard terms and conditions. It is important to keep in mind that the builder, architect or consultant will generally seek to include terms and conditions that are favourable to themselves.

Points to remember

* Always use a written contract, but before agreeing to it, read all of its terms. It is generally best to use or amend a standard form contract (such as one available from Master Builders Northern Territory or Australian Standards for a small fee) rather than to use a contract supplied by the builder. If there is any confusion, get legal advice. Where only a quotation is provided, be sure to work out the terms of the contract before engaging a builder or giving the go-ahead for work to start.

* If any confusion arises at any time regarding a dispute or the terms of contract, it is best to seek legal advice before the matter becomes a problem. If the practitioner has breached the Building Act 1993 (NT), has carried out work in a negligent or incompetent way or is guilty of professional misconduct, a complaint can be made to the Building Advisory Services, which may refer the complaint on to the Building Practitioners Board for disciplinary action, which can include financial penalties and suspension of registration.

Consumer guarantees

The Building Act 1993 (NT) now provides for a number of consumer guarantees which must be included in every building contract for prescribed building works (see above at Registration). Any contract provision which attempts to remove or restrict the consumer guarantees is invalid. The guarantees can be relied on by any current owner of the property, provided it is still within the consumer guarantee effective period. For structural defects, this period continues for six years after construction is complete. For non-structural defects, it is a period of one year after construction. The statutory consumer guarantees include:

• the building work will be carried out in a proper workmanlike manner in accordance with the plans and specifications specified in the building permit and building contract;
• all materials will be good and suitable for their purpose;
• all materials will be new unless the contract specifies otherwise;
• the work will be carried out in accordance with the Act, Regulations and other Territory laws;
• the work will be carried out with reasonable care and skill; and
• the work will be completed by the date specified in the contract or, where no date is specified, within a reasonable period.

Common problems

My builder has not shown up on site for two weeks! What can I do?

The action that can be taken depends on the terms of the contract and whether the completion date has passed. If the contract does not have a term requiring the builder to undertake the work diligently and without break, and the completion date has not passed, it may be that the builder is not in breach and there may be little that can be done. It is uncommon for builders to abandon building jobs. If the completion date has come and gone, the person should contact the builder and find out what is happening. If the matter cannot be resolved informally, the contract should provide for a process for resolving disputes. Owners should keep in mind that completion of the works by the specified date is now a consumer guarantee under the Building Act 1993 (NT) and may be able to be dealt with as a Consumer Guarantee Dispute in certain circumstances. If a trigger event has occurred, then the owner may apply to the Fidelity Fund to recover some funds for the non-completion.

I moved in three months ago and already several of the doors will not close properly and a crack has appeared in the wall in the bedroom. What can I do?

The issue of doors that do not close properly is probably more serious than wall cracks, because it indicates movement in the building. The person should contact their builder quickly and seek to have the problem rectified. The owner should check the building contract and confirm whether it is still within the relevant consumer guarantee effective period. If it is and the builder refuses to rectify the defects, the owner should first contact NT Consumer Affairs to seek assistance in resolving the dispute. If this is not successful, the matter may be referred to the Commissioner for Residential Building Disputes by lodging an application and paying the required fee.

I went to a well-known home builder to build my home and now they tell me that I'm going to have to pay for any extras, like a dishwasher, or the floorboards. Will I have to pay?

You should look at the Schedule of Finishes or specifications that form part of the building contract as these should make it clear what is included and what are extras that are not included in the building's scope of works. The owner is liable to pay for any extra items that are not included in the contract. It is unusual for electrical items, such as dishwashers, to be included in specifications.

My builder presented me with a range of tiles to choose from, but I do not like any of them. He says that I have to pay extra if I want a different tile - is this true?

For items such as tiles and exposed timber, it is important to look at the prime cost clauses in the contract. These often specify the type or value of the tiles included as part of the contract. In the case of tiles, it is normal for the prime cost to be limited to a certain amount per metre. A person having their home built should be able to choose any tile as long as it does not exceed this amount. However, if the desired tile is more expensive, say $20 more per metre than the prime cost stipulated, the person will have to pay the $20 per metre difference as an adjustment to the contract price.

I've heard somewhere that new homes have to have smoke detectors and must meet certain energy efficiency requirements - is this true?

Under the NCC it is compulsory to install hardwired smoke detectors in new homes. The NCC also sets out some minimum requirements for the purpose of improving the energy efficiency of the building. The Northern Territory is divided into two climate zones with the main purpose of the energy efficiency measures being to reduce cooling costs, through using appropriate materials, glazing and sealing, as well as optimising air flow throughout the building.

I think my builder is in financial trouble because some of the sub-contractors have been complaining to me about not getting paid. What should I do?

While rumours should not be ignored a person has to be very careful not to breach their contract with a builder by not paying them but paying their subcontractors directly. However, the person should be wary of making any payments, including progress payments, until work has been completed. You should remind your builder of the effect of the SOP legislation (see When a builder has not paid subcontractors )

Dealing with builders

Choosing a builder

With the introduction of registration of all residential builders, finding a qualified builder has become easier. A person intending to engage a builder for a project, house construction, or even a small job, such as erection of a shed or remodelling a kitchen, should go to the Register of Building Practitioners on the Building Practitioners Board website or contact telephone number 1800 193 111 for a list of registered builders. In addition to asking for their registration certificate, a person could ask to see references from previous clients or examples of prior work and talk to people in the building industry about who they recommend for work. The choice of builder, architect and trades people should be made with caution and written contracts always used.

When to pay for work?

The maximum deposit that a builder can ask for is 5% of the total contracted price. The Building Regulations 1993 (NT) now also provide a standard progress payment schedule, which sets out timeframes for payments as the work progresses, as follows:

1. a deposit of no more than 5%;
2. no more than 10% on completion of the base stage;
3. no more than 20% on completion of the frame stage;
4. no more than 25% on completion of the enclosed stage;
5. no more than 30% on completion of the fixing stage;
6. no more than 7% on reaching practical completion; and
7. at least 3% after the Occupancy Permit has been issued to the owner.

The standard progress payment schedule can be varied if the parties agree to a different schedule in the contract, however the final payment can never be less than 3% of the total contracted price. Owners should never pay for work before it has been completed.

Never pay for work that has not been performed or pay any money in excess of that required under contract and make sure that progress payments are for work done and not simply time on the job.

When a builder has not paid subcontractors

In the NT there is no occupational licensing of trades people in the building industry (except electricians, plumbers and gasfitters).

A builder will usually contract other tradespeople with the skills required to perform particular parts of the work, such as plumbers, tilers and glaziers. The Security of Payment (SOP) legislation was introduced to protect contractors, subcontractors and suppliers in the building and construction industry from poor payment practices and to ensure that all these parties receive timely payment for the performance of construction work, or the supply of goods and services. Under the SOP legislation:

• payment provisions which have been used in contracts in the past are no longer enforceable, such as the 'pay if paid' or 'pay when paid' clauses which allowed a contractor to withhold payment to the subcontractor until the contractor had been paid by the principal
• a clause which allows payment to contractors to occur more than 50 days after it is claimed by the contractor is no longer enforceable and must be read as requiring payment within 28 days after it is claimed
• where a construction contract does not have a written term dealing with matters in relation to payment, terms are implied into the contract to cover those matters. These include entitlement of the contractor to be paid and to claim progress payments, and the process for making and responding to progress claims.

Most importantly, the SOP legislation implements a rapid and informal adjudication process for determining payment disputes under construction contracts (see Payment disputes). It would be a good idea to seek legal advice in relation to the application of the SOP legislation if an issue arises.

Disputes

Common reasons for disputes

When a building contract is entered into, the parties have committed to completing certain obligations in accordance with the terms set out in the contract. Disputes arise when one party alleges that another party to the contract has failed in its performance of one or more of their contractual obligations.

Disputes between builders, trade contractors, building designers and homeowners occur for many reasons, including:

• inaccurate or incomplete documentation
• variations to the original plans
• pool communication
• unsatisfactory work
• delays
• lack of knowledge of building practices.

Your relationship with the builder is like any other business relationship. It carries certain roles and responsibilities, and it is important to know what to do and where to go if a problem arises. Good communication is the first step towards finding a resolution.

Depending on the nature of the dispute, you may need to contact more than one service to resolve a problem. For detailed information about building complaints and disputes, please visit https://nt.gov.au/property/building/make-a-complaint-or-settle-a-dispute/building-complaints-and-disputes.

Contractor, subcontractor and supplier payment disputes are dealt with under the adjudication processes set out in the SOP legislation (see Payment Disputes).

Unsatisfactory work

An owner may be dissatisfied with the work of a builder because they allege that one or more of the statutory consumer guarantees has been breached or they consider the work is not in accordance with what was agreed in the contract - see Consumer guarantees.

Where the dispute has arisen and the contract is still on-foot, the parties should communicate with each other to attempt to resolve the dispute amicably. The building contract should also set out dispute resolution procedures for the parties to follow. It is a good idea to keep records of all communications and put complaints in writing to the builder. This may become helpful evidence if the dispute remains unresolved and escalates to a more formal dispute resolution process.

When a builder goes under

There have been examples in the NT of building companies collapsing mid-way through building projects, which often caused huge losses to consumers. The Building Amendment (Residential Building Consumer Protection) Act 2012 commenced on 1 January 2013 to address this, and now a consumer can apply to the Fidelity Fund NT for a contribution where the building works have been left incomplete or non-compliant. Such contribution is capped at 20% of the contract price, up to a maximum of $200,000. See Fidelity Fund webpage.

Complaints alleging professional misconduct or breaches of the Building Act 1993 (NT)

Written complaints can be made to the Director of Building Control if there is an allegation of professional misconduct, unsafe or non-compliant work, or offences under the Building Act 1993 (NT) or Building Regulations 1993 (NT).

The Director of Building Control can do any of the following:

• Dismiss a complaint
• Investigate a complaint
• Prosecute a building practitioner for an alleged offence
• Refer a building practitioner to the Building Practitioner’s Board for inquiry.

A referral to the Building Practitioner’s Board for inquiry is a disciplinary process and not an avenue for dispute resolution between owners and builders. The Building Practitioners Board, amongst other things, may impose financial penalties or suspend registration but is not able to order the builder to pay compensation or rectify defective or non-complete work.

The Director of Building Control cannot do any of the following:

• Assist with contractual disputes
• Order the return of a progress payment
• Order a practitioner to undertake rectification work
• Order compensation be paid
• Order unfinished work to be completed.

Poor workmanship will generally not be considered professional misconduct unless there are patterns of incompetence or negligence or serious incompetence or negligence. What constitutes incompetence and/or negligence is subjective and determined by what skill level a person working in that profession would reasonably be expected to have. The test is not what a perfect person would have done.

Dispute resolution processes

If you are unable to resolve your complaint regarding building work informally, then you will need to find out what your contract says about the process for resolving a dispute. A process for resolving any dispute between you and your builder should be included in your contract.

Most building contracts contain clauses that provide mechanisms for dispute resolution such as arbitration. Arbitration, as it relates to building contracts, involves appointing an independent person to determine a dispute (see Alternative dispute resolution ). Like a termination clause, an arbitration clause may provide for a series of notices which must first be served on the other party. If the dispute is not resolved as a result of these notices, the matter is referred to arbitration and an arbitrator appointed.

Mediation or conciliation

Mediation and conciliation services are available for free through the Commissioner for Residential Building Disputes (Commissioner). Either party in a residential building dispute can refer the matter for mediation through lodging the approved application form, which is available at the Consumer Affairs website. If the application is accepted, the other party will need to agree to participate in the mediation.

Mediation and conciliation can be very useful in quickly and cheaply resolving disputes, as both parties are involved in negotiating an acceptable agreement, which then becomes binding and enforceable.

Technical inspections

Where an owner alleges that the work carried out by a building contractor is defective, either party may apply to the Commissioner to appoint a qualified person to inspect the work. Such applications must be made within the consumer guarantee effective period relevant to the allegedly defective work, being one year for non-structural work and six years for structural work following the completion of the construction period.

A technical inspection application may be helpful to resolve a dispute where the owner and builder disagree about the quality of the workmanship in the allegedly defective work. However matters which are more technical in nature, such as engineering, design, or testing of materials used, will likely be beyond the scope of these inspections and may require more expert advice.

Consumer guarantee disputes

The Commissioner may hear an application from an owner about an alleged contravention of a statutory consumer guarantee. However, the Commissioner can only consider applications regarding consumer guarantee disputes where no contractual relationship exists between the owner and the builder. This will be the case where, for example, all obligations under the contract have been completed, or there has been a dispute between the parties which has broken down the relationship irretrievably.

Applications must be made within the consumer guarantee effective period relevant to the allegedly defective work. Where the claim relates to incomplete work, the application must be made within 90 days of the date the builder ceased to work. Applications must include payment of the prescribed fee and be made in the approved form, which is available at the NT Consumer Affairs website.

If the application is accepted and the matter proceeds to a hearing, the Commissioner can decide whether or not the builder has contravened the consumer guarantees alleged in the application. If the Commissioner thinks the application involves a complex question of fact or law, the application may be referred to the Northern Territory Civil and Administrative Tribunal (NTCAT). The Commissioner can order the builder to complete the work, rectify defective work, or pay compensation up to the amount of $100,000. However, the decision will need to be referred to NTCAT if the compensation assessed exceeds that amount. NTCAT can also hear applications for the review of decisions made by the Commissioner.

Payment disputes

Consistent with legislation in other states, the Construction Contracts (Security of Payments) Act 2004 (NT) adopts a process of rapid adjudication as the means of providing a short, interim resolution of payment disputes, and to ensure the timely payment of contractors. The legislation is designed to assist a contractor's cash flow and ability to prosecute underlying payment disputes to final resolution by the courts or other contractual dispute resolution processes. The provisions of the Act still apply to the owners under residential building disputes, even where they allege that the builder has performed defective work.

A payment dispute may be a dispute over an amount claimed by a builder which has not be paid by the due date, or has been rejected or disputed, or when security or retention is not released as required under the contract.

The adjudication process is designed to operate alongside the dispute resolution process provided for in the contract. This means that if a party is dissatisfied with an adjudication determination, they may take the dispute to court, or utilise any other resolution process available under the contract, for instance, arbitration as discussed above. The Act specifically provides that payments made as a result of an adjudication determination are payments on account only. This means, that even after an adjudicator has determined that a payment is due, it is open to a party to pursue court proceedings or arbitration in relation to the same subject matter, and for the court to make orders for the repayment of amounts paid pursuant to adjudication under the Act.

The parties can agree on a particular individual as adjudicator at any time (including nominating that person in the contract). Alternatively, parties can agree on the industry body who will appoint the adjudicator to hear any payment disputes which arise. If the contract is silent, when a payment dispute arises, the party seeking adjudication can request an industry body to appoint an adjudicator.

In line with the aim of the legislation to have payment disputes determined as rapidly and inexpensively as possible, the Act provides that the adjudicator acts informally and is not bound by the rules of evidence. The adjudicator also has other powers including the power to arrange for testing, inspect the works, engage experts and award interest on amounts determined to be payable.

Each party bears their own costs for the adjudication, but the adjudicator also has discretion under the Act to order a party to pay costs if that party has been frivolous or vexatious in its conduct of the adjudication. The parties also equally bear the costs of the adjudicator for work done even where the adjudicator is disqualified or dismisses the application (see below). Parties should be aware that they may be required by the appointed adjudicator or prescribed appointer to provide a deposit, or reasonable security, for the costs or anticipated costs of the adjudication.

A person who wishes to invoke the adjudication process does so by notifying the other party and the adjudicator in writing within 90 days from the payment dispute arising. The other party to the contract then has 10 working days to respond. The written application and response must generally include details of the contract, any payment claim giving rise to the payment dispute, and set out all the information, documentation and submissions relied upon by each party.

The adjudicator then has 10 working days to make a decision but can ask the Construction Contracts Registrar to extend that time. Within that time, the adjudicator must either:

• decide whether a party is liable to make a payment or to return the security or retention; or
• dismiss the application without determining it.

If the adjudicator finds the party is liable, the party must pay the adjudicated amount within a prescribed period. If this is not done, the determination can be enforced as a judgment debt, statutory interest accrues, and the contract work can be suspended upon giving prescribed notice. The decision of the adjudicator is final unless and until the dispute is resolved by a court, arbitrator or other dispute resolution process.

If the adjudicator decides to dismiss the application without determining it, for example, because they consider it to be too complex, that decision is reviewable by a Local Court. In either case, the adjudicator must give reasons for their decision.

If a payment dispute arises, and the adjudication process is adopted, each party must act quickly, as there is no provision in the SOP legislation to extend the strict time limits.

Architects

Architects are engaged to design and supervise the construction of buildings, both commercial and residential. Architects offer a range of services, from design and planning, right through to the role of coordinator of all parties involved in the building process, including builders, engineers, surveyors and other subcontractors.

Before hiring an architect, a person should discuss the project, services and likely fees with the architect and compare them to others. Ask the architect to show examples of projects they have done for other clients.

The Australian Institute of Architects (AIA) is the professional body for architects in Australia and maintains a list of members as well as providing a guide to finding an architect on their website (see Contact points). The NT chapter of the AIA is based in Darwin and can provide information and assistance to people seeking the services of an architect in the Territory.

The Architects Act 1963 (NT) creates a system of registration for architects, architectural companies and architectural partnerships in the NT. Architects may be removed from the register for fraud, criminal conviction, habitual drunkenness and addiction to narcotics, the giving or taking of 'kickbacks' (bribes) or allowing another person to practise in their name. An unregistered architect is not allowed to call themselves an architect. The Architects Act 1963 (NT) does not cover naval, landscape or golf course architects or architectural draftsmen. A person can make a complaint under the Architects Act 1963 (NT) in relation to the conduct or operations of a registered architect. A complaint must:

• be in writing in an approved form
• set out the grounds on which the complaint is made, and the facts relied on by the person to constitute the grounds
• be signed by the person making it
• be lodged with the Northern Territory Architects Board.

Determinations by the Board may include dismissing the complaint for frivolity, that no further action is required, reprimanding or fining the registered architect and imposing conditions on or suspending or cancelling the architect's registration.

The Architects Act 1963 (NT) allows for review of the Board's determination by a Minister and further appeal to the Local Court.

Other building issues

Plumbing

The Plumbers and Drainers Licensing Act 1983 (NT) creates a register of plumbers and drainers who are issued with a licence or registration card by the Plumbers and Drainers Licensing Board. Consumers should request to see a current licence or registration card, demonstrating that the tradesperson holds the relevant qualifications. It is an offence to carry out plumbing or draining without a licence or plumbing or draining work as a journeyman without a registration card. A journeyman is a tradesperson in the trade or plumbing or draining or both, who works under the direction of an advanced tradesperson and may direct or supervise apprentices or unqualified workers.

Plumbing involves installing, altering, removing or repairing fixtures, fittings and pipes designed to receive and carry sewage or water, and the ventilation of those fixtures, fittings and pipes, and which includes the installing, altering, repairing, maintaining, removing or connecting of a hot or cold-water service to land.

Draining involves excavating, installing, altering, removing or repairing subsurface fittings or pipes designed to receive the discharge from soil or water pipes and carry that discharge to a common sewer, drain or septic tank. Apart from this sort of work, an owner-occupier (not a tenant) can do their own repairs. For example, they can install irrigation up to the point of connection with the NT water supply system. The actual connection to the mains water supply must be carried out by a plumber and any underground plumbing work must remain uncovered until the requisite approval to connect is provided.

A certifying plumber and drainer must be engaged to prepare the relevant drawings. If no other building work is involved in the project, the certifying plumber and drainer must submit the relevant drawings to the Building Advisory Services for auditing and filing in the departmental files. If other building works are involved in the project the self-certifying plumber and drainer must submit the plumbing and drainage design to the building certifier who is doing full certification work.

Electrical work

The Electrical Workers and Contractors Act 1979 (NT) creates a system for granting licences and permits. It is an offence to undertake electrical work without the requisite licence or permit for the work. However, electrical work done on motor vehicles or electrical circuits or installations, where the voltage does not exceed 32 volts AC or 115 volts DC, and a few other limited areas, is excluded from this prohibition.

Encroachment of buildings

The Encroachment of Building Act 1982 (NT) provides for situations where buildings are constructed in such a way that they encroach upon neighbouring land. Encroachment occurs when a building or part of it extends onto neighbouring land, either overhanging or under the ground. The encroaching owner may apply to have the property encroached upon transferred or leased to them or the adjacent owner can apply to have the encroachment stopped, to reclaim the lost land or seek compensation.

The court has wide powers to deal with these kinds of disputes. In some instances, the court may order an encroaching owner to pay to the adjacent owner compensation equal to potentially more than three times the unimproved capital value of the land encroached upon. Alternatively, the court may order the adjacent owner to lease or transfer the land in dispute to the encroaching owner. Generally, however, the court will order the encroaching structure to be removed.

Building restrictions

Before preparing to build, a person needs to ensure that their plans adhere to any requirements placed on the land, such as zoning, easements, covenants or other restrictions attached to the land. For example, some housing estates have their own guidelines in relation to how far apart houses should be from each other, how many storeys high they can be and so on. The Planning Act 1999 (NT) provides for the planning and control of the use and development of land in the NT, and sets out matters that a consent authority needs to take into account before approving a development application. A person preparing to build or renovate a house or building should make contact with Lands and Planning Services to find about any particular issues that may apply to their plans (see Contact points).

Setbacks

Anyone constructing a new home is required to set the home back from the road and property boundaries. Setbacks are provided for in the NT Planning Scheme. The amount of setback required varies between zones, but for one and two storey residential buildings in urban areas, the minimum setbacks are 6 metres for homes facing primary streets, 2.5 metres for homes facing secondary streets and 1.5 metres for rear and side boundaries. Residential buildings in rural zones require setbacks of at least 10 metres. A person who wants to reduce the amount of setback - that is, build closer to the road or other boundaries - can apply for a waiver.

Contact points

Building Practitioners Board

This body is established under the Building Act 1993 (NT) with responsibility for builder registrations, owner-builder applications, developing codes of practice and monitoring builders' professional conduct, including taking disciplinary action where necessary.

Tel: 1800 193 111
Email: bpb@nt.gov.au
Website: www.bpb.nt.gov.au

Northern Territory Consumer Affairs

Consumer Affairs can provide information about consumer protections provided by law when purchasing goods and services, as well as residential tenancy and building disputes

Tel: 08 8999 1999 or 1800 019 319
Email: consumer@nt.gov.au
Website: http://www.consumeraffairs.nt.gov.au/Pages/default.aspx

Building Advisory Services (BAS)

This body provides information on the standards required under the Building Act 1993 (NT) and Building Regulations 1993 (NT). BAS keep records of all building documents, including plans, permits and certificates, as well as providing a range of FAQs and Fact Sheets which may assist in further understanding the building process.

For general enquiries, email bas@nt.gov.au.

Darwin – Phone: 08 8999 8985
Katherine - Phone: 08 8973 8926
Alice Springs / Tennant Creek – Phone: 08 8951 9218

Director of Building Control

The Director can receive complaints about building practitioners, where there are allegations of professional misconduct, unsafe or non-compliant work, or offences under the Building Act 1993 (NT) and Building Regulations 1993 (NT).

Tel:08 8999 8935
Email: bas.compliance@nt.gov.au

Lands and Planning Services

This function of the NT Department of Lands, Planning and Environment can assist with providing information about the land proposed to be built upon, the NT Planning Scheme and planning restrictions in place, as well as the development assessment process.

For general enquiries, email planning.ntg@nt.gov.au

Website: www.lands.nt.gov.au

Darwin - Phone: 08 8999 8963

Katherine – Phone: 08 8951 9242

Alice Springs / Tennant Creek – Phone 08 8973 8926

Master Builders Association Northern Territory

Master Builders is an industry association for developers, builders and contractors and offers various standard form contracts. Master Builders also provides information regarding insurance, training and dispute resolution.

Phone: 08 8922 9666
Email: info@mbant.com.au
Website: https://www.mbant.com.au

Fidelity Fund NT

The Fidelity Fund NT provides Residential Building Cover under the requirements of the Building Act 1993 (NT). The contacts below can provide information and assistance to both owners and builders.

Phone: 08 8922 9680
Email: fidelityfund@mbant.com.au
Website: https://www.fidelityfundnt.com.au/

Australian Institute of Architects (AIA)

The AIA maintains a list of registered architects and can assist in finding the right architect for your job.

Phone: 08 7969 6000
Email: nt@architecture.com.au
Website: http://www.architecture.com.au/nt-chapter