Understanding Your Building Contract
When you’ve spent a lot of time and energy finding the right block, and you’ve chosen the builder who will construct your beautiful new home, be sure to read the entire building contract carefully before you sign it. You should not only make the effort and read it but fully understand your obligations under the contract as well as those of the builder. It’s a good idea to ask your solicitor to check the contract for you before you sign it to make sure there are no loopholes or errors that will cost you money down the track.
What Are the Laws Regarding Building Contracts?
In Australia, consumers and builders must have a written, formal contract that meets all the requirements of your state or territory’s Domestic Building Contracts Act. The contract is a legally binding document which is between you and your builder and it contains various kinds of information which will include details about progress payments, a clear start date and completion date and the particular specifications for your new build.
When you’ve spent a lot of time and energy finding the right block, and you’ve chosen the builder who will construct your beautiful new home, be sure to read the entire building contract carefully before you sign it. You should not only make the effort and read it but fully understand your obligations under the contract as well as those of the builder. It’s a good idea to ask your solicitor to check the contract for you before you sign it to make sure there are no loopholes or errors that will cost you money down the track.
What Are the Laws Regarding Building Contracts?
In Australia, consumers and builders must have a written, formal contract that meets all the requirements of your state or territory’s Domestic Building Contracts Act. The contract is a legally binding document which is between you and your builder and it contains various kinds of information which will include details about progress payments, a clear start date and completion date and the particular specifications for your new build.
Why You Must Read and Understand Your Contract
The main and crucial reason you should be crystal clear about every aspect of the contract is if any incorrect information is written in it – whether it’s part of the original agreement or a variation – IT IS NOT LEGALLY BINDING.
Who Draws Up the Contract?
Contracts provide a basic guideline if a dispute between you and your builder arises. Your builder could have a lawyer draw up a contract or use their industry association’s standard contract for domestic builds. No matter what contract is used, you are obliged to educate yourself on the contents of the document and the process of the building contract.
To Help With the Contractual Process, Here Are Some Tips:
- Make absolutely sure your contract has a precise start and finish date.
- Make sure there is a reference to detailed plans, structural drawings and/or specification.
- Make sure there is a clear statement about your cooling-off period.
- Make sure you have your contract checked by a lawyer or a specialist building consultant before you sign it.
- If there are any blank sections at all in the contract, be very sure to cross them out.
- Check all details concerning insurance, particularly warranty insurance.
- Make absolutely sure you fully understand the cost of the work and any variations that might occur in the future during the build.
- Read and understand the Domestic Building Contracts Act in your state territory. The Act outlines a number of warranties applied to all domestic building contracts, so you should know whether or not the work carried out on your build meets those standards.
- Fully comprehend the schedule of progress payments which are outlined under Section 40 of the Act. If you are entering into your own schedule of payments, you ought to seek legal advice about it.
- Be absolutely sure to document all variations, and make sure you understand them before the work begins and before you sign off on them.
- Remember, you have a five-day cooling off period after you sign the contract.
- From day one, be sure to document all work conducted, and where possible, get everything in writing.
- Record the progress of your build by taking photographs regularly and date them.
House Inspections is an established building inspection company operating throughout Victoria, Geelong, and surrounding areas. Our company is run by registered builders who offer a professional service, and who write full, comprehensive reports that are easy to understand. Our Inspectors are VBA Registered Practitioners with many years of experience serving all of Melbourne. Call us today on 0450 632 867 or email info@house-inspections.com.au.
Author’s Bio
Alex Morrison has worked with a range of businesses giving him an in depth understanding of many different industries including home improvement, financial support and scissor lift
