There is a monetary limit on the committee's powers. Builders are required to take out insurance cover before obtaining a building licence from the local authority, even if they own the property they are building. If they sell during construction or during the period of indemnity insurance, subsequent owners are covered. Claims under the home indemnity insurance policy must be made within a period of six years from the day of practical completion of the contract. Before paying a deposit, owners should check with the builder to ensure that home indemnity insurance has been taken out or is not required.
Special rules apply to owner builders.
Everything agreed to between the owner and the builder must be set out in a written contract which must be dated and signed by both parties. Owners must be given a copy of the contract as soon as is practicable after it has been signed and before the building work starts. It is the builder's responsibility to see that all these steps are taken. If not, the owner may terminate the contract - see Termination of contract. After work begins, the builder can only require an owner to make progress payments for work actually done or goods supplied.