What should my building contract cover?

Building or renovating your home can be an overwhelming and stressful journey. If you’re feeling swamped with the excess of information or are struggling to make crucial decisions, don’t worry – you’re not alone!

From our experience, the best way to approach the building process is by being prepared and arming yourself with as much information as possible. Once you understand the general process, you may start to feel excited about your new home and may even learn to enjoy your building journey.

One of the most important parts of the process that you need to understand before building is building contracts. 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 QLD, If your building project is over $3,300, your builder is legally obliged to create a contract.

If you’re planning on undertaking any of the following projects, you must have a building contract.

• Building, renovating or extending a home (includes alterations, repairs and other improvements)
• Landscaping, paving or building a retaining wall
• Creating structures, driveways or fencing
• Installing lighting, heating, air conditioning, water supply or sewerage
• Installing a swimming pool or outdoor living area
• During the demolition or removal process of a home or part of a home

A building contract is of the upmost importance as it acts as your safety net if something doesn’t go to plan. The contract ensures that you’re entitled to rights under the Domestic Building Contracts Act 2000 and the Australian Consumer Law.

Sticking to your Budget

To avoid disputes between you and your builder, you should source the cost of as many items as possible prior to signing your contract. If you haven’t selected everything at the time of your contract, your builder may include prime cost or provisional sum items in their place. Prime costs include fixtures and fittings, while provisional sums include particular work, such as excavation or soil testing reports.

When it comes to your fixtures and fittings, make sure you consult your builder to discuss exact costs before making any major decisions. It’s all too often that clients make choices before consulting their builder, only to discover that these don’t match the budget. Because the planning stage is such a lengthy exercise, you want to ensure that you’re being realistic when it comes to decision making. Your builder will be able to provide advice surrounding the costs of materials, floor plans and other options before creating your contract.

Make sure you find a builder who charges for a quote. You might be thinking, ‘why would I do that when some builders do it for free?’ The answer is – you want to find a builder who is giving you a comprehensive quote that reflects your project brief.

The fact is, quotes take a lot of time, so if you seek someone who does the job for free, generally the quote won’t be sufficiently detailed. You want to ensure that the quote that they give you at the beginning is comparatively close to the total cost that you are given at the end of the process. As a guide, a quality builder will generally provide a quote of around 10-15 pages in length.

Overview of the Contract

Your contract must include a clearly stated analysis of what you wish to achieve. You should have at least one meeting with your builder prior to the contract being drawn up, to discuss the project overview and ensure that you’re on the same page prior to construction. The overview should cover everything from relevant earthworks, to electrical, plumbing and even painting.

Ensure that your contract includes a copy of your building plans, a section that states that the works will be completed according to the plans and a finalised date in which the project should be completed. The contract should also include a clause, which states that any variations or changes made to the original contract must be submitted in writing and signed by both the builder and the client.

5 Day Cooling Off Period

When building you’re entitled to a cooling off period, which means that you can withdraw without penalty within the first 5 days. Before your builder can begin construction, they must ensure they have all of the necessary information and paperwork approved by you, as well as building and planning permits.

We understand that there is a lot involved in the building process and it can be overwhelming. If you have any questions about what a building contract should cover, get in touch with the friendly team at Adam Mason Homes today.