When you are buying a house or land, most people engage a lawyer to assist with the process. However, not many people engage contract lawyers when they are building a home or performing renovations or extensions. Often these agreements may be expensive and it is wise that an experienced property lawyer assists you with understanding your domestic building contract and your rights under the domestic residential building legislation.
Which legislation applies to me?
Each State and Territory in Australia has legislation that applies to the local building industry. This legislation covers a number of areas and usually provides for the licensing of builders, implied terms and conditions for domestic building contracts, building insurance and dispute resolution procedures between builders and their domestic clients. A list of main legislation for each State and Territory is listed below:
- Building Act 2004 (ACT)
- Home Building Act 1989 (NSW)
- Building Act (NT)
- Building Act 1975 (QLD)
- Building Work Contractors Act 1995 (SA)
- Local Government (Building and Miscellaneous Provisions) Act 1993 and Building Act 2000 (TAS)
- Building Act 1993 and Domestic Building Contracts Act 1995 (VIC)
- Builders Act 2011 and Home Building Contracts Act 1991 (WA)
Legislation implies conditions into building contracts which covers the quality of the building work, the quality of the building materials and the completion of the work.
Main Requirements for Domestic Building Contracts
Building contracts generally have the requirement of being in writing (the ACT legislation is silent on this point). In many jurisdictions, standard form contracts are available from the relevant state body or association. Look for the Housing Industry Association or the Master Builders Association.
Each State and Territory legislation typically requires the description of the price being paid for renovations or extensions. It should include the method for its calculation so consumers should carefully check the price includes building materials. Plans and specifications can also be attached to assist with calculating the price. The contract should also deal with variations to the original plan and provide mechanisms in determining price variations.
Furthermore, particularly for contracts for a larger sum, there should be a provision for progress payments. Usually, any payment demanded before work commences is not permitted. Building contracts should also be clear on the completion date. If work is completed late, the contract should set out if any penalties apply.
Most importantly, there should be a dispute resolution clause. This sets out the process that needs to be followed before a consumer can make an application to a tribunal or court. Due to the nature of building contracts, there are often specialist tribunals set up under the applicable legislation to determine building disputes.
Builders must carry insurance under home building legislation. This covers any claims made about a breach of the implied terms of the contract. You should check your home building legislation of your state to know what amount of coverage builders must maintain.
You should exercise care and diligence when engaging with a builder to ensure they have the appropriate approvals from a council or the building section of the relevant government authority. Obtaining approval is often the responsibility of the consumer and not the builder; however, this is often subject to both parties to determine.
LegalVision has a team of experienced lawyers specializing in building contracts and building contract disputes. We can also provide assistance with building disputes. Call us on 1300 544 755 for a fixed-fee obligation-free quote or contact us through the form on this page.