Five things to know before you start renovating

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A home renovation can add extra space and comfort to your existing home, without the cost of buying and selling. And staying in the same home avoids the need to move out of your neighbourhood, away from nearby friends, family and schools.

However, to ensure that your renovation is as stress-free as possible and to minimise the possibility of crisis and setbacks, it is important to plan. As part of the planning process, you'll need to consider a number of factorsi. Here are five things you should know before you start your renovation.

One of the first things you must do before renovating is fill out the appropriate paperwork and obtain approval from the respective authorities.

Necessary paperwork

Depending on the type and scale of your intended project, you may need to lodge a Development Application (DA) with your local council and have it approved before you can start making any changes to your homeii. Failure to submit the right paperwork may see you at odds with various conditions, regulations and by-laws; in short, at odds with the law. Small renovations and repairs like painting the outside of your home or replacing the roof may also require council permitsiii.

Your local council will be able to advise you about what sort of measures you should be taking and the regulations that may apply to your home and project. You may also have to consider:

If your plans do not conform to your respective legislation, it's likely that your DA will be unsuccessful and you will be unable to proceed with your projectiv. The BCA's recommendations are given legal status by State and Territory's own laws and regulations on the matter - the BCA must therefore be read alongside your respective State or Territory legislationii.

You may also be required by law to have a contract drawn upvi. If your renovation requires work from outside tradespersons and that work is valued at an amount that exceeds your State's declared amount, a contract may be legally essential. However, a contract does not need to be dependent on the cost of the job and it might be worth considering one if it gives you peace of mind.

Hiring contracted builders

Home renovations can be carried out by a contractor or by the owner.

Contracted builders receive payment for doing the work and should only be hired if they are registered and appropriately accredited. A builder enters a contract with the home owner that can make clear the conditions under which the work will be done. A contract typically includes the price of the builder's work, the dates of work commencement and completion, description of the work to be done and the builder's licensing informationvi. Contracts can also spell out the consequences of either party not upholding the conditions of the contract.

Doing it yourself: becoming an owner builder

A homeowner that does their own building renovations or manages sub-contractors in their home is called an owner builder. People choose to become owner builders to reduce costs, have flexibility in their completion schedule, and to have control over the projectvii. Owner builders are subject to their own set of legal obligations and rights (according to respective Territories and States laws) and should be familiar with the appropriate legislation. For those wanting to do it themselves, they will need domestic building insurance and an owner-builder certificate of consentviii.

Owner builders' responsibilities include but are not limited to: the occupational health and safety of workers on-site; organising permits, insurance and inspections; and ascertaining that contractors have the appropriate qualifications, licenses and insurance. While owner builders may carry out part of the work, they must employ licensed tradespeople for certain jobs include electrical and plumbing tasks.

Home renovation can be painstakingly slow work, but it's important to do the job well and to not cut corners.

The importance of budgeting

Your home renovation budget should be well-planned and realistic. Try to calculate the costs you will be faced with and then add extra to that budget so that you have room for the unexpected: the Australian Government initiative Your Home recommends that a renovation budget should include an added 5-10% to cover extra costsi. The Archicentre cost guide gives estimates for costs of typical renovations across Australia.

It's important to make the most of the money you invest in a renovation. Shop around for quotes and avoid taking shortcuts when it comes to people you hire. For example, a good designer can give wise advice that can save you money on your renovation and even more in the long-termi. Do your homework to find reliable and good contractors by asking for recommendations from friends, family and other people helping out on your projectviii. When working with contractors be clear about what is to be included and what is to be excluded from the priceviii.

If you're taking out a loan to finance a renovation, shop around for the best deal that suits your own repayment needsi. Avoid fines by having good site management that considers waste management, recycling, litter and sediment controlsviii. One thing to note is that the changes you make to your home (especially to do with energy or water saving) may leave you eligible for rebates, which can be factored into budgets and reduce your costsi. To stretch your budget further, look for cost effective ways of doing what you have to do and be proactive about potential things that could go wrong and end up costing you morei.

Safety Points

It is important that any renovations you make to your home are done safely. Pre-1990 homes may contain asbestos and asbestos-containing structures (such as eaves, roofing and wall-linings) must be dealt with by specialist asbestos removal contractorsix. Similarly, homes that pre-date the 1970s may have be painted with lead-based paints and this also requires specialist treatment when removing or re-paintingix. There may also be structural issues with a home and these must be surveyed by a trained architect, builder or engineerix. Structural issues can arise from all sorts of damage, including that by termites and rising damp. It is also important to take care when doing renovations and DIY projects around the home - ladders and power tools can be extremely dangerous when used incorrectly.

If you are conducting renovations to your home and you have small children around, be sure that they are never left unsupervised in the part of the home where the renovations are taking place. If possible, keep children away from areas where work is being done.

If you've made renovations to your home, you may need to update your insurance policy. It's also important to realise that insurance covers have certain clauses that come into effect when you are renovating, and that you may need to take measures to ensure that you remain safeguarded in certain situations. For information on how renovations impact your home insurance contact Allianz today.

i Your Home, 2012, Renovator's Guide: Getting started,

ii, 2005, Rules & Regulations,

iii Consumer Affairs Victoria, 2010, Building and renovating: a guide for consumers,, p.21

iv Your Home, 2012, Renovator's Guide: Finding more information,

v, 2005, Building Code of Australia,

vi Thomson Reuters, 2012, Find Law: Renovating your home? Understanding the basics of a building contract,

vii Consumer Affairs Victoria, 2010, Building and renovating: a guide for consumers,, p.22

viii Your Home, 2012, Renovator's Guide: Working with your builder,

ix Your Home, 2012, Renovator's Guide: Assessing your home,