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Everything you need to know about building contract reviews

When you are building a new home in Australia, or making any major renovations, you will have to sign a building contract with your builder .  This explains everything that the builder will provide you in terms of your work as well as how much you owe them. A building contract is put in place to...
Everything you need to know about building contract reviews
iBuildNew Editorial TeamFebruary 21, 20184 min read
When you are building a new home in Australia, or making any major renovations, you will have to sign a building contract with your builder.  This explains everything that the builder will provide you in terms of your work as well as how much you owe them. A building contract is put in place to protect both the builder and you the customer from any surprises down the track in the event of a dispute.Your home builder can choose to use a standard template, such as the HIA building contract, or they can have their own contract produced. Either way, you should consider having your building contract reviewed by a professional before you sign it. Because building a house is both an expensive and personal experience, making sure that you are protected is critical.When you are having your building contract reviewed, make sure that you pay attention to some of the key aspects listed below.
  • Is your builder registered?
Each state will have their own builder registry, so make sure your builder is registered with the relevant state body. You should also make sure they have a building insurance policy.
  • What is the process for changing the building plans?
Sometimes either the builder or the purchaser may require the building plans to be altered. This may be due to a change in heart about the placement of the bedrooms, or you may realise you want a larger living area, but could also be due to the builder, the land or the budget. Make sure there is a process in place for if changes do have to be made by either party.
  • How will you be paying your builder?
The most popular way to pay a builder is with progress payments. This means that with every stage that the builder finishes, such as the base, framing or fixing, you will pay a percentage of the total cost. This is a great option, as you will only have to pay your bank interest on the portion which the builder has actually finished.
  • Can you visit the building site?
It’s very common for people who are building their dream home to want to go and visit the site, however, some builders will write into the building contract that you aren’t allowed. Make sure you know what you are allowed to do.
  • What building fees will you be required to pay additional to the build itself?
Additional to the cost of the build, you may be required to pay other costs. For example this could include government levies, local council inspections or a surveyor. Make sure you are aware of these so you have the money saved away.
  • What damages are you entitled to and when?
Many building contracts include a clause that is related to losses if the terms of the contract are breached. Make sure you know when the contract would be breached and how much you are entitled to.These are just a few of the main points to consider when you have to sign a building contract. There are many other factors that could have a big impact on your finances and way of life if something were to go wrong. For example, if your builder doesn’t finish your home in the defined period you may be entitled to damages, but if you haven’t had your contract reviewed, it might be far less than required to cover rent and travel, meaning you might be significantly out of pocket.

It is always best to be safe rather than sorry. Having an expert review your contract is the best way to protect you and your family. If you are looking for a conveyancer to review your contract make sure you check out Titlexchange who offer fixed cost contract reviews at an affordable price. 
iBuildNew Editorial Team

iBuildNew Editorial Team

As the specialist voice of Australia’s largest new home building resource, the iBuildNew Editorial Team delivers deep-dive coverage into the house and land sector. From analysing new estate launches to highlighting the country’s leading home designs, we track the building journey to provide clarity for every buyer.

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