Building work, particularly new home construction or renovation, is likely to be one of the biggest investments you will ever make.

There is a significant amount of risk, uncertainty and cost involved so it pays to have a written contract in place with your builder.

A written contract not only protects your financial interests but it provides your builder with an incentive to build right first time. Your contract document should amoung other things spell out expectations for both you and your builder; warranties and remedies; how disputes will be resolved; and that the work will meet the requirements of the Building Code.

Always take time to read the contract document – don’t sign it straight away. You may want to negotiate changes to some of the clauses, especially if your builder has specified a payment schedule that requires you to fork out a significant proportion of the cost up front.

A deposit should be a reasonable proportion of the total value of the work. Try to avoid paying a deposit of more than 10 per cent – if your builder wants more, ask them to put their reasons in writing to give you additional protection. Your project and money is at risk if you pay too far in advance.

Contracts protect you and your builder but they also commit you to obligations and responsibilities. You may want to take legal advice if you are unsure about any of the details of the contract. 

For more information about contract documents click here.