Home Building Tips For Builders In NSW
What is a Charge over the Site?

When a person lodges a caveat over real estate, they are telling the world that they have an interest in that property, usually because the person who owns the land owes them money.

Where a caveat has been lodged over real estate, it will be very difficult for the owner to sell that property, because no buyer would want to buy real estate that someone else has claimed an interest in (a buyer expects to buy real estate that is completely free of any interests from third parties).

It is possible for a builder to lodge a caveat over the real estate of the client where the building works have been carried out, if the builder is still owed money.

However, the law states that a builder cannot lodge a caveat over the client’s property unless:

1. there is a term in the contract that allows the builder to do this; and
   
   
2. the builder has obtained judgment in a court or tribunal.
   

Under no circumstances should the builder agree to removing a clause in the contract that states that the client charges the site with due payment to the builder. This is because if such a clause is not in the contract, the builder will not be able to lodge a caveat over the land, even if the builder is successful in obtaining judgment in a court or tribunal.

The Online Building Contracts that are available through Home Building Business Centre all have clauses to this effect that protect the builder.  You should examine whatever contracts you regularly use to ensure that such a clause is contained in those contracts.