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Signing A Building Contract – What You Need To Know

Signing A Building Contract – What You Need To Know

After your quotes are in, and the builder chosen, it will be necessary to sign a  building contract with your chosen builder prior to work commencing. All building work over $3300 in Australia requires a contract, and for works to be carried out for less than this amount there are also contact available to protect you as a consumer.  Signing contracts are a big deal and there are a few things you need to know before you go ahead.

Building Contract – The In’s and Outs

Type Matters

The type of contract will depend on the kind of work you are having done. There are contracts for works below $3300 value, small works contracts for works between $3300 and $20k, renovation and extension contracts for larger works, new home contracts, and bathroom and kitchen contracts. The HIA, Master Builder’s Association and the QBCC in Queensland all offer suitable contracts for your builder to use. In other states again the HIA, and Master Builder’s Association along with the governing body in your state for example the Building Professionals Board in NSW. Ask for and expect a contract from one of these reputable organisations.

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A Contract Is A Binding Legal Document

Ok, this might be a little obvious, but it never hurts to point out the contract you are signing is a binding legal document. That said, changes can be legally made if all parties agree, in the form of variations. Variations must be agreed on, and signed off on for them to be legal. They are very common, we have a client at the moment who has 30+ variations, as the work has expanded or changed as the contract time has gone on.

A Building Schedule Should Accompany Your Contract

A building schedule is a separate document that outlines the schedule of finishes and finer details of what is included in your contract. This is most important and I strongly suggest that you do not sign your contract without the details in your building schedule being complete and correct. The building schedule take precedence over any drawings and previous quotes, this is an area in which many consumers become unstuck, something they thought was included in the original quote wasn’t mentioned on the building schedule and that item was then not covered. Read the fine print.

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Ask For A Draft

Ask for a draft copy of your contract and a couple of days to slowly and methodically read through it. Be sure you understand everything within the contract. Let you builder know if you have any concerns. If you have chosen the right builder they will be more than happy to discuss any potential issues with you. Once you are completely satisfied, let your builder know you are ready to sign.

Do Some Basic Checks First

Prior to signing the contract, take the time to do a few checks on your builder. You can do a license check with your state governing body for example the QBCC or the Victorian Building Authority. Ask your builder to send through copies of his insurances, including public liability. While not compulsory, ask your builder if they are part of a reputable housing association like the HIA or Master Builder’s Association. In the case of an extension or renovation, call you own home insurer and discuss what you are about to do, find out if this will create any gaps in your home insurance.

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Remember that your builder should always be willing to talk through any questions you might have. If you find your builder is not willing to patiently explain something, they are the wrong builder for you. You will have hundreds of questions over the life of your contract works, you need to be able to communicate effectively and comfortably with your builder, every step of the way.

Have you signed a contract lately? Any exciting ones? Where would you love to own a home?

Nicole xxx

 

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