Renovators Warned On Cash Economy

Renovators who fall for the discount for cash line, which can be used by handymen and tradespeople to obtain a job, could find they have not only encouraged the law to be broken by not paying taxes, but more importantly have lost any legal right to consumer protection.

Angus Kell

Archicentre, the building advisory service of the Australian Institute of Architects said with the economic downturn many people looking for alternative employment tend to move into the residential building area in a handyman role.

Angus Kell, ACT & NSW State Manager of Archicentre said unfortunately this role sometimes becomes extended into areas well beyond individual skills and appropriate registration.

"Anybody paying cash for home maintenance or renovation without a contract, payment schedule or receipts for payment could easily find themselves without any consumer protection."

Archicentre, through its provision of Construction Advice Reports that check the quality of work often comes across circumstances where people have paid in advance and work is not completed or completed work is not up to standard.

"Without proof of payment it is almost impossible to hold people to account."

Mr Kell said tradespeople who offer a discount for cash to provide a more competitive price also can be highly likely to cut corners on other elements of their work by using inferior products such as seconds or fail to get appropriate permits leaving the customer with the responsibility for illegal building.

"This in turn can cause the home owner a major problem when selling the home if appropriate documentation cannot be produced. In the worst case scenario the home owner can face the expensive problem of being forced to demolish the work by the local council."

Archicentre recommends to its clients that they use appropriate qualified and licenced tradespeople, get at least three quotes, and arrange an appropriate contract that clearly states what the job will cost, the standard of materials and an agreed payment schedule as work is completed.

Some recent examples in New South Wales brought to Archicentre's attention includes:

the elderly woman who paid $12,000 to a unlicenced 'friend' to build a new Kitchen, which when completed showed signs of sub-standard building practice;

the single woman who accepted a $13,000 quote to rebuild a Garage, after she had spent nearly $65,000 was left with an unfinished and defective building;

and the family who paid over $500,000 to a builder (with a restricted licence for works less than $12,000), who left for overseas without finishing the works and leaving the family with an expensive bill to complete the works.

"In the current climate it might seem attractive to some people to pay cash for a cheaper quote, however, in the long run it can turn out to be extremely expensive with legal and compliance costs costing as much as the renovation project," Mr Kell said.

www.archicentre.com.au

Media Enquiries:
Angus Kell ACT & NSW State Manager Archicentre (02) 9555 5111 Mobile: 0412 565 023
Ron Smith Corporate Media Communications Archicentre (03) 9818 5700 Mobile: 0417 329 201

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