| KEY ASPECTS OF THE ABS ACCREDITATION PROGRAM
1. WELCOME
Welcome on board as part of the Australian Building Services (NSW) Pty Ltd ("ABS") elite group of builders. This document provides you with an outline of the key aspects of the accreditation program operated by ABS.
The Builder Participation Rules("Rules") will govern the relationship between you and ABS. As with any important legal document, the Rules must contain all the necessary "bells and whistles". To understand the accreditation program operated by ABS, we recommend you read the whole of the Rules and should you have any questions, please contact your lawyer or financial adviser.
2. KEY ASPECTS OF THE ACCREDITATION PROGRAM OPERATED BY ABS
The key aspects of accreditation program (Builder Participation Rules) operated by ABS are:
2.1 Payment of an annual subscription to ABS;
2.2 Financial checks as required;
2.3 Quantity surveyor checks of costings for each building project;
2.4 Building inspections of each building project;
2.5 Specific financial drawdowns for each building project; and
2.6 Signing a multi-party deed for each building project.
3. ANNUAL FEE
To become accredited with ABS you must pay an annual fee. The annual fee is currently $5,000 plus GST and is paid as part of the initial accreditation process and on the anniversary of your accreditation with ABS each year.
Payment of the annual fee gives you the following:
3.1 access to home owners warranty insurance issued by an insurer associated with ABS without the asset base restrictions or financial caps of other home owner warranty insurers;
3.2 issue of a Certificate of Eligibility from an insurer associated with ABS which should enable you to maintain a full Building Licence with the Office of Fair Trading;
3.3 issue of an ABS Accreditation Card; and
3.4 freedom to build as many projects as you can manage in a year with no financial cap, subject to our financial and quantity surveyor checks.
4. FINANCIAL CHECKS
As required, ABS will carry out financial checks on you. These financial checks will be completed by an independent accounting firm to determine, not only your financial status but also how you run your business.
ABS understands how builders operate, the fluctuations in the market place, difficult clients, supplier restrictions and how these can impact on your business. We are looking for accredited builders that carry out quality work and run efficient and professional businesses with sustainable profit margins.
To help you and your financial advisers, ABS has developed a financial checklist of the items required to enable ABS to carry out the financial checks required by the Rules. A copy of the financial checklist is available on the ABS website www.homeownerswarranty.com.au. It is important that you supply ABS with all the information set out in the checklist. Remember, we are here to help, not hinder you.
Finally, information relating to the way in which each project will be funded will be required when you submit your application in relation to each building project.
5. QUANTITY SURVEYOR CHECKS
When applying for Home Owners Warranty for a building project, you must provide the costings for that project. ABS will have the costings for that building project assessed by an independent quantity surveyor. Whether it is Sydney, Melbourne, Coffs Harbour or Wagga Wagga, our quantity surveyors will be fully conversant with cost variations from area to area.
If you have a price advantage in a particular discipline, then simply include those details as part of your costings. The more information you provide, the easier it will be for our quantity surveyors to assess the costings for your building project.
Our quantity surveyors do not require a full bill of quantities to assess the costings for your building project, although you can provide a bill of quantities if you like. However, ABS does need to be able determine how you got 'the bottom line'. If you do not provide us with sufficient information and a further quantity surveyor check is required to assess the costings for your building project, an additional fee of $500 +GST will be charged.
6. BUILDING INSPECTIONS
Given the variety of quality across building projects, our building inspectors seek to ensure that good building practices are adopted by builders accredited by ABS. They are also there to ensure that any drawdowns are in line with the works completed.
Our building inspectors are not there to tell you how to do your job. However, as they will generally have a minimum of 25 years experience in the building industry, they will be available to assist you in any way they can.
Depending on the building project, anywhere between one and five inspections may be required. The number of inspections will be determined by ABS in consultation with you prior to the commencement of the building work.
At the completion of each inspection, the building inspector will issue a certificate to you which will certify that all works have been completed and will enable the builder to seek payment for that work in accordance with the approved drawdown schedule.
A minimum of 48 hours notice is required to enable a building inspector to be on site.
7. SPECIFIC FINANCIAL DRAWDOWNS
As you are aware, many builders seek to set a schedule of payments under a building contract that requires payment in advance of the completed works. A builder accredited with ABS will not be entitled to do this.
ABS will set key completion stages for each building project and consult with you to determine the appropriate value of the drawdowns for each stage. ABS does not want to adversely affect your cash flow. However, ABS will work with you to establish and maintain a sustainable cash flow for each building project.
The maximum drawdown at "Roof On" stage of a building project for a builder accredited with ABS will be 50% of the contract price. The Roof On stage includes an allocation of part of the preliminaries, initial earthworks, initial plumbing and electrical works, footing and slab steel, concrete slab or flooring, timber framework including timber framework for the roof, roof materials on and brickwork to the exterior skin and internal brickwork for full brick construction. Generally, ABS will allow you to arrange as many drawdowns as you require during construction of the building project as long as no more than 50% of the contract is drawn down at the Roof On stage.
Important: With the unlimited variations in building design, more than 50% of the building cost can occur before the Roof On stage. If this is the case in your project, ABS may allow more than 50% of the contract price to be drawn down if it is substantiated by the costings for your building project submitted to ABS. This will then be reflected in the agreed drawdown schedule.
Where a project is controlled by a Project Manager (eg Architect etc.) in conjunction with a lending authority who has appointed their own QS who certifies a drawdown schedule, ABS will accept that drawdown schedule. However, ABS will require copies of any document issued in respect of each inspection.
8. SIGNING A MULTIPARTY DEED
In order to make the benefit of the accreditation system operated by ABS available to all participants in a building project, you will be required to sign a multi party deed with ABS, the owner and, if applicable, the owner's financier. The multiparty deed does not supersede the building contract you enter into with the owner. However, the multi party deed will alter aspects of that building contract such as payment of the contract price and the inspection process.
A copy of the multiparty deed is available on our web site at www.homeownerswarranty.com.au
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Builder Participation Rules 