Practitioners and consumers are required to have a formal written contract which meets the requirements of the Domestic Building Contracts Act 1995.
The contract is a binding document between you and your practitioner, which includes a start and completion date, details about progress payments and specifications for your new home (building project).
When undertaking a building project you should always read your contract and make sure you fully understand its contents.
Your practitioner may use a standard industry contract for domestic housing from their industry association or have a lawyer draft one.
Whatever the contract, it is important that you educate yourself on the document and the contract process.
Contracts provide a baseline in case a dispute arises between you and your builder. If the correct information isn't recorded in the contract, either as part of the original agreement or in a variation, it is not binding. Here are some handy tips to help you with the contractual process:
- Ensure your contract includes a start and finish date, detailed plans and a clear statement about your cooling-off period
- Check your contract with a specialist consultant or solicitor before signing
- Cross out all blank sections in the contract
- Check insurance details, particularly warranty insurance
- Ensure you understand the costings and any subsequent variations
- Familiarise yourself with the Domestic Building Contracts Act 1995. The Act sets out a number of warranties that apply to all domestic building contracts, so the work carried out on your home meets its standards
- Understand the schedule of progress payments set out under section 40 of the Domestic Building Contracts Act 1995. Parties entering their own schedule of payments should seek expert advice
- Make sure any variations are documented, understood and signed before work is commenced
- Understand you have a five-day cooling off period after signing the contract
- Document all work conducted from day one - taking regular photographs and dating them is a good way of recording the progress of works.
Download a copy of Consumer Affairs Victoria's model domestic building contract for new homes.
Read more about building contracts on the Consumer Affairs Victoria website or call Consumer Affairs Victoria on 1300 558 181.