If you are a builder or engaging a builder, there are various legal issues to consider, including deciding on the appropriate contract to enter. Selecting the right contract can be critical to your project’s success. One type of standard form contract is a master builders contract. However, you should always review your building contract before signing it to ensure the risks are allocated fairly between the parties. This article will provide a useful overview of a master builders contract. It will examine their advantages and disadvantages and discuss when to use one for your project.
What is a Master Builder?
A master builder is a builder who is a member of the Master Builders Association (MBA). These associations exist in all Australian states and territories. The MBA represents the building and construction industry and actively promotes the interests of the industry and its members. Likewise, they provide essential representation and services to members and the building industry in areas such as:
- training;
- contracts;
- industrial relations;
- workplace health and safety; and
- building codes and standards.
They also provide various legal services.
To become a master builder, a builder must first satisfy all educational and training qualifications required by the MBA in the applicable state or territory. In addition, there is an expectation that the builder undertakes additional training for accreditation and maintains and improves their skills even after certification.
Likewise, a master builder is expected to have a particular level of knowledge and skill and must work according to a strict Code of Conduct. The expected knowledge and skills that a builder must have to become a master builder encompass areas such as relevant laws, regulations, and codes applicable to the building industry.
What is a Master Builders Contract?
A master builders contract is an industry-specific, standard form contract that the MBA has prepared.
The MBA has a suite of contracts available, including:
- commercial contracts on a lump sum basis and cost-plus basis;
- residential contracts for different value thresholds levels; and
- a variety of subcontracts.
The type of contract you need will depend on the size and complexity of your particular project. Members purchase master builders contracts from the MBA website and use them as required, depending on their business and project needs.
More often than not, a builder will elect to use a master builders contract for a home owner’s project.
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Should I Use a Master Builders Contract?
Master builders contracts have advantages and disadvantages. Notably, some may require modification by way of special conditions to appropriately allocate the risk to the party that is best placed to deal with that risk.
One advantage of using a master builders contract is that the contract will be up to date and include all relevant Commonwealth and state or territory building laws applicable for your specific project. For example, Queensland master builder contracts provide for the mandated five-day cooling-off period. It also sets out an estimated fee according to the residential building legislation in Queensland.
Generally, master builders contracts are drafted clearly and specify each party’s obligations. Another benefit is that most participants in the building and construction industry will be familiar with master builders contracts. The clarity of the contracts and their familiarity in the industry can save the parties both time and expense compared to preparing a bespoke contract.
For Homeowners
In some instances, a master builders contract may not be appropriate. For example, it may not allocate the risk to the party that is best placed to manage it. Alternatively, it may put the builder in a much more favourable position than the homeowner.
Note that parties will often amend standard form contracts, including master builders contracts. Accordingly, you have scope to amend your master builders contract extensively.
If you are a homeowner, we encourage you to seek legal advice before signing your contract. Our lawyers can advise you on the appropriate form of contract for your particular project. In particular, we can help you understand the key legal risks and suggest amendments to your master builders contract. Importantly, engaging a legal professional ensures that your contract appropriately manages any legal risks for your particular project.
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Key Takeaways
Master builders contracts are a standard form contract that the MBA has prepared. They can be beneficial as they are commonly used and are familiar in the industry. However, if you are a homeowner, you should always have a lawyer review your contract to ensure that your project’s legal risks are managed appropriately.
If you need help reviewing your master builders contract, our experienced construction and building lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
A master builder is a builder who is a member of the Master Builders Association (MBA). These associations exist in all Australian states and territories.
A master builders contract is an industry-specific, standard form contract that the MBA has prepared. The MBA has a suite of contracts available, like commercial contracts on a lump sum basis and cost-plus basis. They also have residential contracts for different value threshold levels and various subcontracts.
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