The Complete Guide To The Development Approval Process: Part 2/2
After you have development approval there is a still a lot of work to be done. Here’s what happens after you get your DA Approval.
Speaker 1: Once you’ve received your development approval or DA, as they call it. And, you’re ready to go ahead and move forward and build your property. There’s still some steps that you need to take in the designing process. And, so today, I have with me Luke from durackarchitects.com to talk through this second stage of The Building and Development Process after you’ve had your DA approval. So, hey Luke and thanks for coming on again today.
Luke: G’day Ron. It’s good to be here again.
Speaker 1: Okay. So, we did a previous video, which people should go back and watch if they haven’t already, talking about working through the planning and getting the development approval for your development, whether it be a new house or a renovation or whatever it may be. So, we assuming that now people have that approval, and we’re going to talk through the next steps, which will be getting the construction documentation ready, choosing builder, as well as going through the construction process.
Just to give you guys a really good overview of the complete process that you’re going to go through. So, after we receive our DA, what’s kind of the next step? Do, we then go back to an architect, and then we start working on new documents?
Luke: Yeah, so you’ve got your approval, hopefully that hasn’t taken too long.
Speaker 1: Yeah.
Luke: Meanwhile, your architect may have chosen to continue on with the documentation in the hope that there wouldn’t be any real issues with getting the approval or things might have been put on hold until you’ve got that approval from council. So, assuming everything goes well, your architect can say, “That’s great, we got our approval. We’d like to move ahead with the next stage.”
So, the next stage is basically an additional level of detail to the drawings and documents that you supplied council that enable a build up to price and build your project. So-
Speaker 1: So, this is not just the blueprints that you see, that gives you the overview of the floor plan and stuff like that. This is like, “You need X amount of timber and like all these sorts of materials to go into the house.” Is that what this is?
Luke: Yeah, it’s the detail that a builder needs in drawing form, and written documentation form that allows them to build what you designed. So, you’ve built a house that’s got these lovely screened balconies on it.
You’ve designed it with these steel beams that run the perimeter. How exactly do you want those steel beams to look? How do you want the screen to connect to them? How are they going to hook onto the building? It’s that detail that lets a builder know, “Okay, it’s steel, it’s not just a line on the page. It’s got a certain type of connections and this the way the architect wants us to connect it to the building.”
So, builders don’t typically build from DA drawings, or development application drawings, although from some cases they do. But, there’s not a lot of detail in DA drawings. They’re there to give the council a general idea of what you’re planning to do, and satisfy them that your design sits within their rules and codes and controls.
But, in order to get the building built you have to add more detail. So, as they say God is in the detail. And, you need to take those DA drawings to the next level, which involves in many cases some additional months of work in order to get them to that stage that they can be priced.
Speaker 1: Okay. Yeah, it’s good to give people a timeline of how long these things take, because a lot of people think, “Okay, I’ve got my DA approval, next day, we’ve got the builder on site, the house will be build really quick.” So, there’s actually another couple of months in terms of getting these construction documents ready.
Luke: Right, and that happens all the time. [inaudible 00:04:25] we got the DA, we want to start building next week and that’s good and that’s not what happens.
Speaker 1: I can see why you’d have the architect working on your construction documents while you haven’t been approved yet, but you submitted it. Because that way, when you finally do get it approved, especially if it’s going to be like 100 days for some councils, like you’re primed and you’re ready to move as quick as possible.
Luke: That’s right. And, that’s also why people, when they’re deciding to buy property in the first place. If they know that they bought it, they would develop it, they try and set up arrangements with the existing owners that they could start documenting their DA prior to having the sale in the bag, so to speak, so that there’s no lag in time. But, there are obviously risks involved.
So, in the case of the DA, if you start this construction documentation stage before the DA approval, council may object it, or they may say, “You have to take that top level off,” And, you’ve already started moving ahead with that documentation stage and so [crosstalk 00:05:39]
Speaker 1: So, it can lead to extra costs, because there’s extra work involved. But, it can also speed up the process. So, it really depends how likely you think you are to get it through approval as to whether or not you want to take that risk.
Luke: That’s right. So-
Speaker 1: Or, how much money you have.
Luke: Yeah, yeah. Well, that is the case.
So, after your DA, you’re doing this extra level of documentation that involves getting your consultants involved again. So, you’re structurally engineer then can do more detailed design about how this building’s gonna stand up and coordinate it with your design. At some point along the line these drawings also become your CC, or Construction Certificate drawings. So, they’re basically an approval. They’re also drawings that allow you to start building. They’re generally in accordance with the approval and the different building codes. So [crosstalk 00:06:51]-
Speaker 1: So, is there another approval process you have to go through? So, you go through DA, you get those approved, then you draw up the construction documents. Do those construction documents then have to be approved by council or by someone before you can start building?
Luke: That’s right. So, there’s really another stage in there. So, you’re doing your documentation drawings, after your approval, and then there’s something called your construction certificate. So, yes there is another approval that basically says, “What we have drawn is what we got approval for from council.”
Speaker 1: Yup.
Luke: Yup. What’s to say you get an approval with one balcony and the architects come and your client says, “Just put another balcony on there.”
Speaker 1: “Yeah, just do it … Be fine.”
Luke: Yeah, and it does happen all the time. And, there’s someone there from council or private certified that looks at those drawings and goes, “I’m looking at your DA drawings, I’m looking at your construction drawings and they’re generally the same.”
Speaker 1: Yup.
Luke: “There’s more detail, but they’re the same.” And, that document approval’s called your CC. [crosstalk 00:08:00]
Speaker 1: Okay. Construction certificate.
Luke: Allows you to start building.
Speaker 1: ‘Cause the DA approval sounds quite difficult, and like you could get setbacks and things like that. Is the construction certificate as laborious as that? Or is it kind of easier to get through?
Luke: It’s more a question of just satisfying the level of detail that you need to supply. It’s less about … are there going to be any hidden surprises that you’d get thrown at you in the last minute. You’re just going to make sure your stairs comply with building code, that you don’t have more stuff on your drawings than what was in the approval. That’s right. It’s a bit of ticking the boxes. Little bit of ticking the boxes.
Speaker 1: And, is there a timeframe on construction certificates passing at all?
Luke: Well, it’s a pretty straightforward process. Once you’ve got the drawings you supply them to your certifier and they look at them, and it just depends on their workload really, might only take a week or two to do that.
Speaker 1: Okay. So, we’ve done our construction documents, we’ve got our construction certificate, we’re now onto selecting our builder.
Luke: Yeah. So, those construction documents that you’ve worked up, along with your consultant drawings, your geo-technical engineer, your structural engineer, and so forth. They are there to be a package that a builder can then price on or tender on.
Speaker 1: Yup.
Luke: The stage an architect can be involved in can be what we call the “Full Service,” so they can go from sketch design all the way through to construction on-site. Or, clients may decide they only want the architect to be involved from sketch design through the DA. But, an architect can be involved in this tender stage. So, that would be; they’ve drawn up the documents, they’ve called on a number of builders to look at those documents, and say, “We think we can do it for this price.”
It’s part of the architect service to review those prices and see where each of the bills are, comparing oranges to oranges and whether there’s any discrepancies, and so forth.
Speaker 1: Well, that’s one of the things, when I was talking to people in the past, that can be really tricky with builders, is that you get a certain price, but it doesn’t include certain things like; flooring, or landscaping, or driveways, or all that. There’s all these hidden costs that come after this seemingly low quote. So, you’re saying that, you can hire an architect to help you go through the builder’s quotes and to point out, or to make sure that all the builders are quoting on the same thing, that they’re not leaving anything out. Like, you as an architect will actually help people understand that?
‘Cause truthfully like, if most people look at either a construction document that you create, or a builder’s quote, most of them won’t really be able to look at that and understand, “Is everything there or not.” Like, lets face it, not many of us can apply that level of detail.
Luke: Yeah, it is.
No, it is a real meticulous sort of exercise that you need to go through to make sure everything’s included, nothings been missed out, there are no hidden things in there, and importantly everyone’s tendering on the same level. Each builder has been given the same level of documents and they’re all pricing off the same thing.
Speaker 1: So, do you often see cases where builders will be quoting, and their quote’s actually quoting different things, even though you supplied them with the same construction documents?
Luke: Well, we’ve found that two or three builders are tendering on the same thing, but they may replace something that you’ve nominated with an alternative. So, I’ve found that a certain sink is not in supply anymore, that you thought was available. And, they’ll throw in their version. And, you’ve nominated a $2000 sink, and they’ve replaced that with a $200 sink. So, obviously there’s quite a big difference in cost, but also quality or finish.
So, it is one of those things that needs to be assessed by an architect to make sure everyone’s on the same ball, and that you’re choosing the right builder. ‘Cause choosing the right builder is an extremely important part of the process, just as important as deciding which architect you’re going to use.
Speaker 1: Well, that’s the thing. The builder is kind of where the build of the money is going, right?
Speaker 1: It’s probably the biggest decision you make. And, I feel like, a lot of people make the decision without enough consideration. So, is there any advice that you would give to people when choosing? ‘Cause obviously we look at price as like the main differentiator of builders, but that’s generally not really the only thing to look at, or necessarily the most important thing to look at. What should we be looking for?
Luke: Well, builders who have done the sort of work that you’re looking to do. So, if it’s houses, that they’ve worked on houses, that they’ve worked on type of house that you’re doing. If you’re doing renovations that they’ve done a lot of renovation work or just new houses? Or, vice versa? Are they people that you get on with personally, because that’s very like the architect/client relationship, builder/client relationship is also a very personal one, you’re spending a lot of time with them.
These projects can be six months to two years in duration, or more. So, you want to be dealing with someone that you can trust. And, that’s really the fundamental thing. So, a few recommendations from friends that you know who’ve built and used a builder that they’ve been happy with is really important.
The architect may suggest or recommend builders, but just as importantly as if the client has a builder that they feel they could work with. That leads me to one important point. There are two avenues that you can go down when selecting a builder.
You can chose a preferred builder that you’ve worked with before, you’ve heard good things about, or you just get on with them, and think, “I’ll be able to work with this builder.” And say, “I’m going to work with you. And, we’re going to work towards a price … we’re going to sit down and make sure we’re working towards the same goal.” So, that’s one way of doing it. But, to do that you have to really know that you can trust that builder.
Speaker 1: Yeah, that sounds like pretty loose and like hairy fairy to me when you’re saying that.
Luke: It’s the way a lot of projects go as well.
Speaker 1: Yup.
Luke: And, then the other way is calling on multiple builders, again, ideal recommendations. But, three as a minimum usually. Three builders that you get to tender on the one project and then you gradually-
Speaker 1: And is that like getting a fixed price? Like you tender to three builders with a goal of getting a set price for your build? And, you choose your builder and you’ve got a set price?
Luke: That’s right. So, there are two types of pricing. There’s your lump sum contract. So, fixed … basically a price that’s established in advance. The responsibility for the cost and time are with the builder.
Or, there’s what’s called a cost-plus arrangement, which typically isn’t in favor of the client. But, essentially where the contractor is reimbursed for the costs that they have actually incurred, plus a fee for their profit and overheads. But, yeah there’s an in-built bias towards the contract or the builder. So, the risks are carried more with owner.
Speaker 1: Yeah, because if they’re getting a set percentage of margin, or whatever, the more expensive the house is, the more money they’re making. So, there is an incentive for them to try and make more money. Not necessarily that everyone would do that, but you’d rather not have the incentive there.
Luke: That’s right.
Speaker 1: Whereas, if you had a fixed price, then it’s the incentive of the builder to get it done as quickly as they can with less like overhead cost that is unnecessary, et cetera.
Luke: That’s right. And, like you said, it’s about time as much as money. So, there’s not the same incentive with the cost-plus arrangement to get the building done on time, ’cause the builder just gets paid regardless. Whereas, with the lump sum arrangement, the time is locked in and the costs are locked in.
Speaker 1: Yup.
Luke: There are pros and cons of both, but that’s the sort of essence of it. So, you’ve either chosen a selected builder and got them to quote on it, or tendered out to three different builders, and they’ve come back with a lump sum price, ideally.
Speaker 1: Yeah, which you get your architect to look over and to point out any errors, or things that are missing, or differences to you-
Luke: That’s right.
Speaker 1: And you can chose your builder.
Luke: That’s right. And, you need to keep in mind that it’s not always the cheapest builder is not necessarily the builder that you would necessarily choose. So, there might be other factors that come into consideration; your relationship, you think that there are things missing that you can’t sort of find what they are, but the price just seems to low. Middle range is sort of where we aim for, somewhere between the highest and the lowest.
Speaker 1: Yeah. And, I guess that’s something you can work with your architect with to kind of understand. Okay, the architect can say … ’cause you build a lot of buildings or have gone through the process and you can say, “It just seems too low. Something off with this.”
Luke: Yeah. [crosstalk 00:18:57]
Speaker 1: Even though you might not be able to pinpoint where it is, it’s like, “Yeah” …
Luke: Once you’ve decided on your builder and their price, you lock in a contract and you sign that contract, of course there are details about … there are all different types of contracts that you can use and so forth. But, enough to say that you sign a contract between the client and the builder to move forward. And, then essentially construction would commence on that basis. And there are details how the construction moves forward, but it’s enough to say that’s the next stage, that the construction commences.
Speaker 1: Yeah, and when the construction commences is your architect still involved? Or do you kind of take a step back at that point, and the builder runs the show, and that person now needs to liaise with the builder in order to make sure that everything’s getting done?
Luke: Yeah. The construction side of the project is definitely a stage that most architects think they should be involved with. That’s to make sure the building is being built in accordance to the drawings, there aren’t shortcuts being taken, that when issues come up, the architect is around to discuss them with the builder, if the builder has suggestions of better ways of doing things that’s often the case that the architect is there to look at those alternatives and assess whether they are in the interest of the building and the client, and move forward with those.
Speaker 1: So-
Luke: And that side’s called the contract administration stage for the architect.
Speaker 1: Contract administration.
Speaker 1: I just want to clarify. The architect is not working as a project manager, right? You’re more like a consultant at this point. You’re checking that everything’s being done right, as well as the builder’s consulting with you if they want to make change. You’re not there driving the builders each day to make sure that things are being done on-point, on-schedule, that everything’s going to plan and to cost?
Luke: Yeah, that’s right. So, we’re there to administer the contract between the client and the builder, to assess claims for payments by the builder, to look at issues that come up, to make sure the building is being built generally in accordance with the drawings. But, like I said, we’re don’t order the timber for the walls. “The builders don’t build, they project-manage,” that’s what Bill [inaudible 00:21:53] told me.
They generally all know how to build, but a building company is there not to nail nails in the floor, they’re there to project manage all the different trades that are on-site. So, a builder will have a carpenter, a tiler usually on their books, and plumbers, and they-
Speaker 1: Plumbers, electricians … And, so they’re also supervising that. ‘Cause there’s a lot of materials that go into building a house. So, they’re supervising that. They’re coming on time. The right tradees are coming in at the right times so that people aren’t doing double-work, or people aren’t just sitting around doing nothing because the materials haven’t arrived. So, there’s a lot that goes into it.
I’m converting a camper van, which is nothing compared to a house, and yet, even understanding that, “You can’t do that until this is done,” and all that sort of stuff. I can’t image it. If you didn’t know what you were doing, it would be really difficult, and there’d be massive time delays when building a house. So, that’s a big thing that you’re hiring a builder for.
Luke: Yeah, it is. And that’s the reason I’m always amazed by owner/builders. So, one other avenue we haven’t discussed, is the client can act as an owner/builder. So, essentially, they’re not nailing the nails into the wood, but they are performing the role of the builder on-site. [crosstalk 00:23:13]
Speaker 1: So, they’re the project manager, they’re sourcing all the materials, coordinating with all the tradespeople, et cetera?
Luke: That’s right. That is an avenue you can go down. You have to get [inaudible 00:23:27] you have to go through a little bit of a certification course too. But, it’s fairly straight-forward. And, that takes the builder’s cost out of it. So, all the trades are still there, all the tilers, and the plumbers and so forth, but you as the client are acting as the project manager.
Speaker 1: And, that’s probably a conversation for another day.
Luke: That’s right.
Speaker 1: Yeah. So, at this point, we’re just going to assume that people have hired a builder. But, yeah, they’re getting the construction done as an architect. You’re helping them to make sure it’s being done to spec and to the drawings, make sure they are doing it right, as well as consulting on any changes with the client and with the builder. And, then assuming the construction then gets done on-time, on-budget, or whatever, do you have any role after that? Do you help with the final inspection or anything?
Luke: We do. So, once construction is more-or-less finished, you have to get another sign off by your council, your private certifier, called your occupation certificate. Which, basically says, “The building is built to code and it’s safe from their point of view to move in.” Then, there’s the defects period, so the architect would go around and looking the defects within the build that need to be rectified before the final payment’s made. So, whether there’s a hole in the toilet, or there’s a hole in the cornices and it needs to be fixed or whatever-
Speaker 1: Yeah, there’s no hole in the toilet, yeah.
Luke: Yeah. But, when we do it, we go around the house with little red sticker-dots and just pout hundreds of little stickers all over the house where things that … So, that doesn’t mean-
Speaker 1: So, do you pretty much always have some level of defects that you need to go through and point out and get them fixed?
Luke: Yeah, we do. And, it’s not necessarily bad builder’s job or anything. It’s just things that during the course of construction maybe something’s got kicked, or whatever and hasn’t been picked up til we looked at it and it just needs to be fixed up.
Yeah, usually there are defects. And, once that part of it’s complete those defects can be fixed over a certain amount time, they don’t have to be fixed straight away. After that, the architect’s will certify practical completion. Which is basically to say that-
Speaker 1: Basically, by then the whole project’s complete, right?
Luke: It is.
Speaker 1: The defects are all done, you’ve got your occupation certificate, you can move in or rent it out. So you don’t need the architect or the builder anymore, ’cause you’re done?
Luke: Well, sort of.
Speaker 1: Okay.
Luke: The defects might have not all been done. They’ve got a certain period within which they can be done. It doesn’t prevent the owner from moving. So, you don’t want to stop the client from moving in because of one hole in the skirting, and you don’t want to stop the builder from receiving their final payment because of one hole in the skirting. So, the defect’s rectification period can happen over a certain amount of time. And, there’s a certain amount of money that’s help back from the builder in a lump-sum [inaudible 00:27:02] contract is held back until all those defects are finished.
Speaker 1: Yeah.
Luke: But, there’s a defects’ liability period that goes on for a certain period. And, once that’s finished, the architect will issue their final certificates, which may be a number of months later. So, that’s if the architect is involved in that contract administration stage of the project.
Speaker 1: Do most people hire an architect all the way through? Or, do they mostly hire an architect up til the DA, or up til the completion of the construction documents? What tends to be most common?
Luke: To be honest, I’m not sure what it is with my colleagues. It’s a real mix. We recommend some level of involvement on-site. Whether it’s just to answer queries on an hourly basis, so they client can just pay the architect on an hourly basis to come out and address some issue that’s come up with the builder or with the project. But, in some way the architect should be involved during the construction. Otherwise, things can go wrong, or things change that weren’t as per the initial design. [crosstalk 00:28:23]
Speaker 1: Okay.
Luke: Things get out of control.
Speaker 1: So, generally you advise that you keep the architect on in some form or another. It doesn’t necessarily to be as intense as what we’ve talked through, but you could hire them on an hourly basis, just when you need them?
Luke: That’s right. Yeah.
Speaker 1: Well, I guess that covers the process. Is there anything that we’ve left out?
Luke: No. I just made a couple notes of important things to remember, just a few of them.
Speaker 1: If you want to hear those important pieces of advice, then that will be available inside my video course on the Essential Guide to Building a House. Inside that video course, you’ll learn how to choose the right piece of land to buy a house. How to avoid the biggest mistakes, as well as how to negotiate properly to save you thousands on your new build.
If you’re looking at doing some sort of build or development, then this is going to be a great course for you. To check it out go to onproperty.com.au/build. And, a big thank you to Luke for sharing all of this information with us.
I really hope that this has helped you to understand the process of planning and getting your property through the development approval process all the way through to construction. And, if you’re interested in hiring an architect in order to get your development done, then give Luke a call. You can check him out by going to durackarchitects.com, D-U-R-A-C-K-architects.com. Or you can just Google Durack Architects, which is what I would do.
But, yeah, massive thank you to Luke. I found this really insightful to understand the entire process, and I hope that you found it just as useful for you. Wish you the absolute best in your property journey, whether it be development, renovation, building new house, whatever it may be, wish you the absolute best. And, until next time stay positive.