Issue Date:  -  Tuesday, 11 January 2000

Shed and garage buyers warned on deposit limit

The Ministry of Fair Trading today reminded people thinking of having a shed or garage built which costs more than $6000 that they should not pay deposits greater than 6.5 per cent of the total price.

Acting Commissioner for Fair Trading Gary Newcombe said WA shed builders had tended to demand much higher deposits from their customers, despite the law prohibiting this.

"Apart from this being illegal, my concern is that the practice exposes consumers to the risk of unnecessary loss," Mr Newcombe said.

"If the contract goes smoothly, problems don’t arise. However there have been several recent cases of shed-builders taking large deposits, then either not starting the work at all or failing to finish the job," Mr Newcombe said.

The Home Building Contracts Act does not allow deposits of more than 6.5 per cent for building and associated work valued between $6000 and $200,000.

The Act also states that:

contracts must be in writing and signed by both parties before the work begins; and
progress payments can only be obtained for work actually done or goods supplied.
"The Ministry has written to industry members reminding them of their obligations," Mr Newcombe said.

"This is also an alert to shed and garage buyers who are unaware this law exists in part to protect them from loss.

"If the shed and garage building industry complies with these requirements, its overall reputation will remain high and consumer complaints will be few," Mr Newcombe said.

Builders who carry out work valued at $12,000 or more also need to be registered if they work in Perth, most of the South West Land Division between Kalbarri and Hopetoun, plus a number of townsites in the Eastern Goldfields, North West, Pilbara and Kimberley regions.

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