If you are building (including repairs, renovations & extensions) regardless of what you are spending, a building contract is a crucial legal document. This will protect you in the case of a dispute with your builder. If the cost of the build is over $5,000 it is a legal requirement that a ‘major domestic building contract’ is written.
Many Australian home builders will choose to use a template for their building contracts that has been written by an industry organisation. Despite this template, it is still advised that your building contract is reviewed by a legal practitioner before you decide to sign it. This will give you peace of mind and reduce the stress of property investment.
Building Contract Review for Your Property Investment
A Building Contract Review will generally include 6 key aspects. Having these reviewed will protect your property investment.
Registered Builder: It is crucial that you hire a builder who is registered with the correct state body and has a building insurance policy.
Building Plans: Confirm what the process will be if either party needs to change the building plans. This will avoid problems from arising during the building process and this section of the contract should include what the process is and any implications such as extra costs and increased timeframes.
Payment Terms: Outline a payment plan – this is highly recommended so that both parties understand when payments need to be made.
Site Visits: Agree if there are any limitations to site visits, this is important to reduce conflict between parties.
Costs: Make sure you have a agreed on what the building fee specifically includes, to reduce worry associated with your property investment. It is suggested that any fees associated with local councils or governments are outlined. If you are unsure or it is not clearly stated make sure you ask your builder what is included.
Damages: Typically, a building contract will include a clause that outlines losses if the contract is breached. This could include contract breaches such as the builder not finishing by the agreed date.
Where Can I Get a Building Contract Review
Although there are 6 of the most important aspects of a building contract, there are many other variable and clauses that you should be aware of before you sign a building contract. Having an expert look at your building contract is the best way to reduce risk when undertaking property investment. The team at Titlexchange offer this service for a fixed price. You can check out their packages here or call them on 1300 776 775.