Recent case law at VCAT has highlighted the need for Relevant Building Surveyors to ensure that the cost of works provided on Building Permit applications is accurate.

As the cost of works is the basis of calculation for the Building Permit Levy payable to the government, a lower cost estimate will result in a lower levy payable.

It is therefore reasonable and in the best interest of the Building Surveyor to request documentary evidence to ensure a correct estimate is provided on the ‘Building Permit Application’. Failure to do so, could result in an underestimate and a breach of duties by the Building Surveyor.

“A building practitioner must act in a competent manner and to a professional standard. It is a common provision under which building surveyors in Victoria are brought before the Building Practitioners Board, if they are accused of failing to act in a competent manner and to a professional standard”.

Documentary evidence may include (but is not limited to):

  • a copy of the building contract (or a copy of a relevant extract of the building contract) identifying the cost of building work
  • documentation/calculations of the cost of materials and cost of labour prepared by the applicant for a building permit (where a building contract is not in place)
  • for domestic building work, a warranty insurance certificate with the building contract amount identified
  • building work plans and specifications
  • cost of building work assessment undertaken by a suitably qualified building practitioner i.e. quantity surveyor
  • industry cost of building work guides etc

A recent VCAT ruling in regard to the underestimate of cost of works, stated; “the Act clearly imposes an obligation on building surveyors to conduct some evaluation of the cost of the proposed building work. In that regard, they may have regard to the contract price, if a contract exists. Alternatively if there is no contract there must be sufficient information available to enable the building surveyor to estimate the cost of the building work.”

Accordingly, to ensure an accurate cost of construction value is provided for building works, it is practical for a Building Surveyor to request a copy of the building contract or relevant documentation.

Resource: Lovegrove & Cotton Pty Ltd

http://lclawyers.com.au/building-surveyors-and-the-cost-estimate-in-building-permit-applications-the-need-to-exercise-due-care/