Navigating a building contract and knowing the key terms

A homeowner sought to engage a builder to renovate their house and decided to obtain legal advice on the builder’s proposed contract.

Building contracts are an essential step in planning for any renovations or building works on your property.  Building works over $30,000 are legally required to have a written contract.  

The importance of having a comprehensive building contract which covers your rights and obligations cannot be understated.  It is imperative you get it right.

It can be challenging to navigate a building contract if you are unfamiliar with them.  Naturally, there are some key terms and considerations that you should look out for when reviewing your building contract, including:

• Description of the work intended to be undertaken;
• Who is responsible for obtaining Council building consents and Code of Compliance Certificates (CCCs);
• Comprehensive build times, including start, end, and payment dates;
• Circumstances which may permit the builder to pause or delay work;
• Contracted price, deposit, and any allowances for unexpected expenses such as increasing price of materials (including invoicing terms and conditions);
• Process for making variations to the building contract;
• Managing defects uncovered after the building work has been completed;
• If the contract is cancelled, who retains the rights to use any plans or designs; and
• Methods of dispute resolution.

These terms are essential in ensuring that your building work goes smoothly.  Any construction can become a stressful and time-consuming process, which emphasises the importance of seeking professional legal advice on your building contract if you are unsure.

A professional will be able to advise on the inclusion or exclusion of any terms in the contract which may not be standard practice or desirable for the kind of building works you are undertaking.  They may also recommend terms which better reflect the rights and responsibilities of both parties and offer you better protection.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.

Guy Goodwin and Raiyan Azmi