The Building Contract is a must-have document if you are building a new home (or renovating, repairing etc). It lays out the guidelines for what is to be delivered, when, and and what cost. It is the document that will always be referred to in the event of a dispute.
Many Australian home builders will use a standard template for their building contracts that have been prepared by an industry organisation. Even if the Contract is built from a standard template, it is highly recommended that you have the Building Contract reviewed by a legal practitioner before signing.
Some of the key aspects of the Building Contract Review that you should be aware of are listed below.
- Is the builder registered? Ensure that the builder you have engaged is registered with the relevant state body and have a building insurance policy.
- If the building plans need to be changed by either the purchaser or the builder, what is the process and what are the implications (cost, time)?
- The payment terms. Progress payments are recommended.
- Site visits. Are there any limitations on the purchaser visiting their building site during the build?
- Costs. The building fee – what does this include (e.g. surveyor and council inspections); any lodgement fees associated with the local council and/or government levy charges.
- Damages. The contract may contain a clause relating to any potential losses if the terms of the contract are breached. An example is if your builder is unable to complete the build within the agreed date in the contract. Damages would include things such as rent and travel incurred due to the breach.
This is by no means an exhaustive list, and only a guide to make you aware of some of the clauses to be aware of. As mentioned earlier, it is highly recommended that you engage with a lawyer to review the contract before signing. The team at Titlexchange™ offer this service to clients purchasing Off-the-plan property. Check out our products page for more info, or arrange a call with one of the team today.