Stop! Read this before signing your building contract

Hold on, wait a minute… have you checked everything below?

Renovating or building your dream home can be extremely daunting. Especially if this is your first time. So we have popped together an easy checklist to follow before you sign any building contract. By being thorough at the beginning of your project can save you a lot of time, money and heartache.

Take a minute before you sign to ensure you have gone over everything and confirm if the builder you have chosen is right for you. After all it is one of the biggest commitments you’ll ever make.

The Builder

Is your builder a licenced builder?

This is essential. Do not proceed with the contract if your builder isn’t a licenced builder. If they are they will be happy to provide you with the licence number and all the details of their qualifications.

Has the builder shown you examples of their previous work?

This is such an important thing to know about your builder – their quality of work. If you are in conversation with a builder and you would like to see what their work is like – just ask.

Walking through current or past projects is a great way to understand their craftsmanship. Depending on the builder they may have a display home to go see, pictures on a website or they may be able to organise a walk through of a past project. This will allow you to see what they can do and you may even get to speak to a past client.

Are you a local builder?

It’s always best to go with a local builder. Local builders know your area, understands what you are looking for and has a vested interest in making the community you both live in better.

The Business

What type of warranty and insurance do you have?

There are a few types of warranty and insurances that home builders can have. Make sure to check with your builder which one they use. The longer the warranty and insurance period is a sign that your builder is confident that nothing is going to happen after the project is completed.

Most builders have an information pack that can help you understand what is covered and what to do if you need to use it.

How do I know if the business is financially stable?

Unfortunately, you cannot just simply ask your builder to show you his books. But you can ask questions like:

  • How long have you been a registered business?

  • How many projects have you completed under this business?

  • Have you ever not completed a home?

The answers to these questions will give you an indication of the financial stability of the business.

How many projects are you working on?

A good builder is honestly hard to find and even harder to schedule. We get it, they are busy people. But you want to know, even if they are working on other projects, how much time they are going to dedicate to you.


What kind of contract do you use?

There are many types of contracts that builders use and it is really depending on their business structure and their relationships with suppliers.

The two main types are Fixed and Cost Plus contracts. Your builder should provide you with a contract from either HIA or MBA – both independent bodies that ensure fair terms for both the builder and customer. Both are industry standards and are recognised by banks, brokers, government and are legal contracts.

What happens if I change my mind after I sign the contract?

Most reputable builders will understand that everyone changes their mind. But it is important to have it in writing. Ensure that your builder allows for flexibility in their contract in case you do change your mind. Most builders will allow you to change your mind up until the start of construction.

What is included in the contract?

It’s really important to know what is included in your contract. Are all the essentials included? Rendering, painting, tiling, cabinets? Ask you builder to outline absolutely everything that they will be completing to you so you are not surprised at the end of the project to find you have to finish off parts yourself.


What is the deposit schedule for the project?

A deposit schedule is really common thing for building contracts. Usually, the project will be broken into phases, once a phase starts you will most likely be required to pay a deposit. Once that phase is completed you will be issued a final invoice.

When will I know the final price?

You should expect to know how much the final price is within the early parts of the planning process. Knowing the final price is used for your finance approval and will need to be discussed with the bank. Your builder will also need to provide you this so you know what options you have for building materials and options for PC items.

Make sure you have a final price before signing a contract.


What is the projected timeline of the project?

It is essential to get a timeline off your builder before you start the process. Getting an idea about how long the project will take is key. This will ensure that the build doesn’t go over time and you can organise yourself around that timeframe.

Also ask your builder about their sunset clause. This is especially important if you are investing or you receive income from the property you are renovating.

How will I be kept informed during the building process?

The best builders are the best communicators and communication is key with building. Check with your builder who is your point of contact throughout your project. It could be a site manager, a project manager or the builder themselves.

You may also like to make appointments and check in days where you can visit site and see the progress of your renovation.


Who do I talk to if I have a problem or something goes wrong?

It’s important to understand what the plan is for if there is a problem with your project. Do this before you sign the contract, so you and your builder understand how you are going to solve the problem if one arises.

Most likely your builder will tell you to contact the person they have assigned to you as the point of contact and then escalate it to the builder or deal them directly.

How will the quality of the project be managed?

Quality is the thing that separates good builders from bad. So before you sign your contract, make sure you understand who is responsible for the quality control of your project. If it isn’t your builder who will be there managing your job, then you should ask who that person is and ask to see their credentials, are they a registered builder too or qualified tradesman?

You may even like to set up a meeting with them to introduce yourself and get acquainted – after all, your going to be spending a lot of time working together.

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