The Building Contract

Any agreement you make with a builder to construct your home must be written down. This written agreement, or contract, must document the rights, obligations and responsibilities of both you and the builder.

A solicitor will also be able to review the contract and ensure the contract meets all your requirements, especially clauses that protect you should a dispute arise between you and the builder.

A building contract should contain the following:

• An architect's building plans and specifications (details of the type and style of finishes, tapware, doors, etc.),
• The builder's written quote,
• The financial lender's requirements (e.g. approvals and inspections),
• Details of the builder's insurance (warranty),
• Comments on the impact of variations or late completion, and
• A listing of construction standards.

Standard building contracts are available from the Master Builders Association and the Housing Industry Association.

Should any variations to the original contract or specifications be required, make sure you obtain these in writing along with the costs to be incurred. Both parties must sign these modifications or additions to the contract.

Payment of a holding deposit occurs once the contract is signed. There is no legal requirement to pay this deposit, but it has become an accepted act of good faith by the buyer.

This deposit can be anywhere between $1,000 to $2,000 to 10% of the total purchase price. The balance should be paid either in progress payments or in full upon settlement, but only if the required work has been completed in full and, where applicable, been passed by the local authority.

Under certain circumstances, and with the agreement of both parties, it may be possible to make small alterations to the contract.

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