7 Things to look out for in your Building Contract

 

So you have just received your “NSW Residential Building Contract for New Dwellings” from your Builder. You flick through, what feels like a ream of paper and you feel a bit overwhelmed. Where to from here?

 

Whilst, we highly recommend that you seek independent legal advice on your specific Building Contract, below are some helpful information to get you started. You should remember though, that this page is for information purposes only and nothing beats proper advice from the right people.

 

Below are a few things you should keep an eye out for:

 

1. Schedule 1 – Particulars of Contract

If the information in this section is blank, get your Builder to fill it out before signing. Never sign a blank Contract. You wouldn’t sign a blank cheque would you? The same rules apply here.

 

2. Schedule 2 – Progress Payments

Double check the percentages and that the amounts add up to your contract price. You will be surprised how often this is wrong! If there is a discrepancy, sort it out prior to signing to avoid any dramas later on.

 

3. Clause 27 – Final Certificate

Confirm with your Builder that they will be providing you with a final occupation certificate for your new home. If not, why not. At the very least, you should get an interim occupation certificate from them.

 

4. Clause 29 – Defects Liability Period

There is a standard period of 13 weeks after your new home is completed, where the Builder will come back and fix any defects on the property. Whilst this is the contractual arrangement, by law the Builder must guarantee their work for a period of 6 years for any “major defect” (being defects to a major element of the house) and a period of 2 years for all other defects. Bear this in mind if there are any defects after the 13-week period.

 

5. Attachment A – Form 1 (Checklist) 

Go through the checklist. It is definitely worth doing. The important thing is that you ask the questions and you understand the answers. If you still don’t understand, keep asking.

 

6. Special Conditions

The “Special Conditions” included in the Building Contract will differ from builder to builder. It is for this reason why it is so important that you either familiarize yourself with the conditions or alternatively, seek independent legal advice. This is because, the Special Conditions can amend the standard terms of the HIA Building Contract by either varying or deleting the existing terms or adding new terms to the Contract. There may be additional costs set out in the Special Conditions or other conditions which may not be in your best interest.

 

7. Consumer Building Guide

If this is your first time building, we suggest that you check out the “Consumer Building Guide” prepared by NSW Fair Trading. It is a great little guide that is generally attached to your Building Contract. If it is not included for any reason, you can download a copy of the guide here.

 

If you have any questions, say “hello” and drop us an email with your questions. We’re here to help!

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