If a builder suggests you get an owner-builder permit, stop.
Industry insight · Consumer protection · 3 min read
NSW Fair Trading has flagged a pattern worth knowing about before you engage anyone for renovation work. It’s not new, but it catches homeowners out regularly — and the consequences can be serious.
Here’s how it typically goes. A builder quotes on your project, then suggests that you obtain an owner-builder permit while they “organise everything.” It sounds like an administrative convenience. It isn’t.
What’s actually happening
An owner-builder permit makes you — not the builder — legally responsible for the work. The moment you take that permit out, the builder steps out of the regulated framework that would otherwise hold them accountable. They may not hold the appropriate contractor licence for the work being done. They may not be required to carry the insurance they’d otherwise need. And critically, the mandatory Home Building Compensation (HBC) cover — commonly known as home warranty insurance — may no longer apply.
HBC cover exists to protect homeowners if a licensed builder dies, disappears, or becomes insolvent before completing contracted work. It’s a legal requirement on residential building work over a certain value. If the project runs under an owner-builder arrangement, that protection can fall away entirely.
What’s left is you — holding the permit, bearing the liability, and facing any cost blowouts, disputes, or defects with significantly less legal recourse than you’d have had under a properly structured contract.
Why builders do this
There are a few reasons a builder might push this arrangement. They may not hold a current licence for the type of work involved. They may want to avoid the obligations that come with a formal building contract — including dispute resolution processes, statutory warranties, and insurance requirements. Or they may simply be operating in a way that prioritises their exposure over yours.
Whatever the reason, the outcome for the homeowner is the same: reduced protection, increased risk, and a much harder path if something goes wrong.
What to do instead
The standard is straightforward. A licensed builder should contract directly with you under their own licence. The contract should be in your name. HBC cover should be provided where it is legally required. None of this is unusual to ask for — it’s the normal arrangement for any legitimate residential building project in NSW.
Before signing anything, check the builder’s licence and insurance status on the NSW Fair Trading register. It takes five minutes and tells you whether the licence is current, what class of work it covers, and whether there are any complaints or disciplinary actions on record.
If a builder pushes the owner-builder route — particularly if they frame it as simpler, faster, or better for you — treat it as a reason to walk away, not a reason to proceed. The arrangement benefits them. It doesn’t benefit you.
If someone you know has been through this
If a builder has already suggested this to you or someone you know, it’s worth pausing the conversation before anything is signed. The suggestion itself isn’t necessarily proof of wrongdoing, but it is a clear signal that the arrangement being proposed doesn’t protect your interests the way a standard licensed contract would.
At Rebilt, every project is contracted directly under our builder’s licence, with the appropriate HBC cover in place where required. If you’ve been pushed into an owner-builder arrangement and want a straight conversation about where you stand, give the team a call.
Have a project? Call Rebilt on 1300 732 458 or get in touch here.
