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Department of Justice

Contracts

If you are extending, altering or putting an addition on your house and the value of the building work is equal to or more than $20,000, then you will need a contract with your builder.  This type of building work is called Residential building work.

You also need a contract if you are having more than $20,000 worth of work done that is associated with your residence. This may include driveways, swimming pools and landscaping.

The contract protects your interests and helps ensure that you get the work you are paying for.

A Residential Building Work Contract is a legally binding agreement between owners and building contractors to perform residential building work. The residential building work contract is a complex document which details the building work that is to be done, and outlines the rights and responsibilities of the owner and the builder. The contract includes all plans, drawings and specifications.

All contracts must be in writing, dated and signed by both parties.

The contract must also include:

  • The names of the owner and the building contractor
  • The building contractor’s licence details (licence number)
  • All terms that are agreed between the owner and the building contractor
  • A clear description of the building work to be done, including plans, drawings and specifications
  • The contract price or an estimate and the method of calculating the price, including prime cost items and provisional sums allowances
  • The practical completion date or the method for estimating the practical completion date
  • A list of all applicable statutory warranties

There are standard residential building work contracts, otherwise known as “standard form contracts”, available from many sources include builders, industry bodies and some lending authorities.  If you use one of these standard form contracts, it is important that you read the contract thoroughly and understand all terms and conditions, prior to signing, to ensure that it accurately reflects what has been agreed.

While there is a minimum cooling-off period of 5 business days for all residential building work contracts, you should make sure you are happy with the contract in its entirety before you sign it.  If you are not happy with any of the terms in the contract, you should negotiate with your builder to add or remove any terms that do not suit your needs.

If you are unsure about any part of the contract, you may wish to take a copy of the contract to a legal practitioner for independent advice.  Please note that by seeking legal advice, your right to withdraw from the contract during the cooling-off period will be affected.

Resources

Residential Building Consumer Guide (PDF, 2.2 MB)

Residential Building Work Contracts and Dispute Resolution Act 2016