Tips from experience — read this before you sign
Building contracts are legally binding documents. Many homeowners sign contracts without fully understanding what they are agreeing to. These tips are drawn from the experience of those who have navigated disputes.
Minimum legal requirements
Every state has minimum requirements for residential building contracts. These typically include: the price and payment schedule, a description of the work, start and completion dates, and details of required insurances. Confirm your contract includes all legally required elements before signing.
What to check in any building contract
- Is the total price clearly stated, or does it rely on estimates and provisional sums?
- What are the conditions under which the price can change?
- What is the process for approving variations, and who can authorise them?
- What are the completion milestones and payment triggers?
- What are your rights if the builder does not meet the schedule?
- What warranty obligations does the builder carry after completion?
- Under what circumstances can either party terminate the contract?
Getting out of a contract
Terminating a building contract is complex and can be costly. Most contracts include termination provisions for both parties. Understand these before signing — and seek legal advice before exercising any termination right.
Variations
Verbal variations are a common source of disputes. Ensure your contract requires all variations to be in writing, signed by both parties, and agreed before the work is carried out.
Implied builder's warranty
In most Australian states, residential building contracts carry implied warranties that work will be carried out in a proper and workmanlike manner, using suitable materials, and in compliance with applicable laws. These apply regardless of what the written contract says.
If it is not in writing, it does not exist. Verbal assurances, promises made during negotiations, and informal agreements have no contractual weight.