Are you looking for building contractors to complete some residential building work? Have you looked at the Building Contract Checklist and determined that you need a building contract? Depending on the size of your project, you will need to provide different home building contracts. This article will examine the various types of building contracts in New South Wales and what you should include in them.
Small Jobs Contract
If the residential building work is worth between $5,000 and $20,000, you will need a small jobs contract. Small jobs contracts need to be in writing, and the parties (or their representatives) must sign and date them. The contracts also need to contain:
- the names of the parties, including the name of who holds the contractor licence (as shown on the licence);
- the contractor’s licence number;
- the description of the work that the contract relates;
- any plans and specifications for the work;
- the contract price (if known);
- a work compliance clause that states the work will comply with the Building Code of Australia, all other relevant codes and standards, and the conditions of any relevant development consent; and
- a clause that limits the liability of the contractor for failure to comply with the work compliance clause.
The contractor must also give the homeowner a copy of the Consumer Building Guide, which outlines the laws and policies about home building.
Contracts (Other Than Small Jobs)
If the work is worth over $20,000, it requires a more detailed and extensive home building contract.
Along with the requirements listed under the small jobs contracts, it must also include clauses:
- detailing any payments which are payable for progress under the contract;
- stating that the parties may terminate the contract under general law principles and that this does not prevent the parties from agreeing to other circumstances in which they can terminate the contract;
- stating that any agreement to vary the contract will form part of the contract and must be in writing;
- detailing a checklist of the 14 items prescribed in the Home Building Regulation 2014 that the homeowner must answer ‘yes’ to;
- stating that the homeowner is entitled to a copy of the signed contract within five days of signing;
- detailing that the contractor is obliged to give an insurance certificate to the homeowner;
- clearly setting out the cooling-off period of five business days;
- of a statement of acknowledgement provided by the homeowner; and
- about any other matters prescribed by regulations.
Fair Trading Home Building Contracts
Both these different types of building contracts are free to download as standard forms from the NSW Fair Trading website. Alternatively, you may draft your own home building contract, or use one from an industry association.
If you are considering using a NSW building contract interstate, you should be aware of the different regulations regarding compliance in each state.
In Victoria, building works worth $5000 and more will still require a contract. However, the contracts are all standard major domestic building contracts. There is also no division between small jobs and large jobs.
In South Australia, the parties only need a written building contract for building work valued at $12,000 or more.
Queensland has fairly extensive regulations regarding contracts and contains multiple contracts including for:
- major works;
- minor works;
- demolition of residential premises;
- new home constructions; and
Deciding which building contract to use will largely depend on the total value of the work. For larger projects where the work is worth over $20,000, the contract will be more extensive and require more specific clauses. For work worth less than $20,000, you will need a small jobs contract. If you have any questions or need assistance drafting a building contract, contact LegalVision’s building lawyers on 1300 544 755 or fill out the form on this page.
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