A building contract is a legal agreement between a builder and a client that outlines all the costs and details involved in a project. In Queensland, any construction work greater than $3,300 means a building contract is necessary to guarantee the protection of all parties.
While each building contract does differ, there are a few common requirements. Whether you’re building a brand-new custom home or simply renovating or extending your existing house, look out for the following in your next building contract:
A building contract is a legal requirement, so it’s important to ensure that all of the details are correct. Make sure your name is spelt correctly and the builders business name, license number and ABN are included and accurate.
Be sure to check that the date of the contract is also correct, and a construction time frame is specified and realistic. Once you sign the contract, you will have a 5-business day cooling off period, after which it will become a legal document. You want to ensure even the most basic details are accurate.
Detailed Overview of Works
Your contract should include a clearly stated analysis of the works involved. This includes everything from demolition work (if necessary) and early construction, to electrical, plumbing works and painting.
Make sure your contract also includes a copy of your building plans and a section that states the works will be completed according to these plans. There should also be a clause stating any variations or changes to the original contract price must be provided in writing and signed by both the builder and the client.
Consumer Building Guide
In Queensland, all builders are legally required to supply a client with the Consumer Building Guide to read before signing a contract. This guide provides a comprehensive overview of what to look out for before signing, including double checking documents, special and general conditions, the builders licence and licence history, the contract cost, start and finish dates and legal obligations.
The guide includes a helpful checklist that allows you to ensure you’ve covered everything before signing.
Your contract should include the final agreed upon cost of your project. Ideally, when it comes to the contract stage you will have chosen as many selections as possible to ensure this final cost is as realistic as it can be.
If you can’t finalise your specific selection, your contract can allocate prime cost allowances for some fittings and fixtures, however these allowances could possibly be for base level items. If you do decide on more expensive appliances, fixtures or fittings, make sure you allow for the difference on top of the contract price.
As well as the total cost, your contract should also include a schedule of payments and a due stage for each instalment. Often payment will be required after the completion of each stage, but this can vary between builders.
It’s important to double check that your builder is covered by Home Warranty Insurance (QBCC Insurance) before you sign your contract. It is in the best interest of both you and your builder to ensure they are fully covered by insurance.
If you are undertaking a renovation or extension project, make sure to contact your own insurance company to ensure your existing structure is covered.
If you’re unsure about something in your building contract, it’s best to acquire legal advice before signing. Remember that once signed, your contract becomes a legally binding document and you will be required to pay all stated costs provided works are completed as described.
When it comes to the contract stage, always take your time. Be very wary of the builder who rushes you into signing a contract or tells you not to worry about missing details. This is never a good way to begin a legal partnership.
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