GUIDES FOR HOMEOWNERS CONSIDERING residential building contracts

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Under the Home Building Act 1989 (NSW), it is illegal to undertake residential building work valued above $5,000 without a licence. This includes all types of tradespeople performing specialised work. 

Do not sign a contract or pay a deposit to a builder without verifying their licence. You can check your builder's credentials by accessing the NSW Fair Trading’s database.

HBCF insurance exists for the protection of homeowners. It provides coverage for the cost of fixing defective and unfinished work if the builder becomes insolvent, dies, or disappears, with a monetary cap currently set at $340,000. Additionally, the policy safeguards homeowners if a builder fails to pay any tribunal or court-ordered compensation in favor of the owner. 

Under section 92(1) of the Home Building Act 1989 (NSW), all builders are required to obtain an HBCF insurance policy on behalf of homeowners for any work valued above $20,000. The builder must provide the property owner with a certificate of insurance. Furthermore, under section 92(2), a builder cannot request or receive a deposit until they have acquired this insurance and presented a copy of the insurance certificate to the homeowner. 

It is crucial for homeowners to follow this advice, as untrustworthy builders may avoid arranging the necessary HBCF insurance to cut costs. Builders with poor track records often struggle to obtain insurance at lower cost, which serves as an additional reason they may not secure coverage. Therefore, it is essential that you confirm this insurance is in place before allowing the builder to begin any work or before making any payments. 

To verify your builder’s insurance certificate of currency, check the Building Commission NSW's HBCF records page.

Under the Home Building Act 1989 (NSW), all building projects valued above a certain threshold require a clear written contract. The Home Building Regulation 2014 (NSW) sets that threshold at $5,000, meaning all building projects above this amount necessitate a written contract. Furthermore, the Home Building Regulations 2014 outline specific requirements for contracts categorized as small, falling between $5,000 to $20,000, and large contracts exceeding $20,000. 

For contracts greater than $20,000, the following requirements must be met to safeguard homeowner rights: 

- Name(s) and licence number(s) of contractor(s). 

- A clear description of work. 

- All necessary plans and specifications. 

- Contract price. 

- A clause confirming that all work will comply with relevant building codes and standards. 

- A clause that limits the contractor’s liability in cases of owner-supplied designs or designs not created by the contractor, commonly known as the "work compliance clause." 

- A clause that limits the contractor’s liability against designs and specifications required by the owner that breach the ‘work compliance clause.’ 

- A prominently displayed contract price with a warning if it is subject to change. 

- A mandatory five-day cooling-off period. 

- A clear and feasible payment and construction schedule. 

- A termination clause. 

- A copy of the HBCF insurance certificate as mentioned earlier. 

- An acknowledgement that the homeowner has received and read the Consumer Building Guide and the Security of Payments Guide. 

- An acknowledgement that the owner has received and completed the 17-item checklist, with a caution to the owner if they cannot complete it. 

- A clause regarding certifier selection. 

It is important to review the builder’s quotes and tenders (if included) to ensure they align with the description and special conditions, providing essential residential construction advice to prevent undermining the property owner’s unique specifications. The 17-item checklist is also an excellent guide for homeowners and should be completed thoroughly, especially for contracts valued over $20,000. 

For more information, see here. This government-provided webpage includes all the essentials and important details to check before entering into building contracts.

It is extremely important for homeowners to ensure that the payment schedule is clear and corresponds with the work done. The payment and construction progress schedule must be included in the contract to protect homeowner rights. These schedules are crucial as they outline the payment and progression stages of your contract, ensuring that builders are only entitled to payment once they have completed each building stage.

Common indicators of a questionable builder include:

- The majority of payments are included in the early stages of the schedule;

- Unclear or incomplete descriptions of the progress stages, which often indicate that the builder may attempt to claim payments before the work is finished; and

- Suggestions from the builder that they do not need to issue invoices as per the payment schedule or that they are entitled to payment for partial completion of stages.

What to do:

Review the payment and construction schedule, which must be part of the contract. Ensure that it aligns with the agreed commencement date and construction period and does not contain ‘rights to additional time and fees.’ Additionally, verify that the schedule aligns with what you agreed upon and that payments are not front-loaded.

If your builder is not transparent about their payment or construction schedule or becomes adversarial when you inquire about it, be prepared to walk away, as that is a significant red flag and an important point in residential construction advice.

If you're still unsure whether your builder is above board, it's essential to investigate the builder’s reputation. Here are some valuable tips for property owners to assess a builder's reputation: 

Social media reviews are a great resource; many Facebook groups feature homeowners sharing their frustrations about poor building experiences. Additionally, checking online review services like Google reviews or ProductReview can provide insight into previous clients' experiences. 

When verifying a builder’s licence, you'll find their record, including any licence suspensions, disciplinary actions, tribunal or court orders, and public warnings. Moreover, you can check the iCRT registry of trustworthy builders, which grades builders based on their financial stability, project history, and overall building compliance.

You should also confirm if the builder is a member of the Master Builders Association (MBA) or the Housing Industry Association (HIA), as this membership demonstrates a commitment to maintaining industry standards and, by extension, homeowner rights. For an added layer of safety, consider utilizing services that conduct independent background checks on credit history, court records, business activity, and histories of phoenix companies, such as those found at Buildcheck.com.au.

Be wary of untrustworthy builders who often present unrealistic offers significantly lower than others in the market. If a builder's offer seems too good to be true, it likely indicates that they are cutting costs and circumventing regulations designed to protect homeowners. This is especially concerning when builders attempt to insert invalid contractual clauses that allow them to impose unofficial markups or additional time on your project.

Under the Building Act 1993 (Vic) and  Domestic Building Contracts Act 1995, builders must be licenced and registered with the Building and Plumbing Commission (BPC) to legally carry out residential building work. 

Operating without a licence is illegal. You should not pay any money to an unlicenced builder, no matter the size of the job or whatever offers the builder makes to incentivise you.

Always ensure the legal entity named in the quote or contract matches the licence number they give you.

How to Check:

Check the BPC’s database here.

For work performed under contracts signed before 1 July 2026, the builder must have obtained Domestic Building Insurance if the works are valued over $16,000. 

For any contracts signed after 1 July 2026, the builder must obtain Home Warranty Insurance for works valued over $20,000.

HWI exists for the property owners’ benefit, as it gives you an avenue to pursue if the builder fails to fulfil its obligations to complete or rectify defective works. 

It’s common for builders to itemise and pass on the cost of insurance directly to the property owners, without applying a mark-up. Unscrupulous builders often try to avoid the cost of taking out insurance, so you should take any suggestion from a builder that insurance is not required as a warning sign. 

For more information regarding what will be covered, see here.

How to Check:

Before paying a deposit to the builder you must ask for a copy of the Insurance Certificate. 

Once you have obtained the copy, verify the certificate on the Building and Plumbing Commission website here. 

This link will also allow you to check the details and overall coverage of your specific policy.

All contracts for domestic building projects above $10,000 must contain the following requirements (which are imposed by the Domestic Building Contract Act 1995):

• Builder’s registration number.
• Be transparent and written in English.
• Total contract price.
• Payment schedule with progress stages.
• Scope of work and specifications.
• Start and completion dates.
• Domestic Building Consumer Guide.
• Insurance details.

While these are a few basic things to include, what to look for specifically can vary from case to case. 

It is particularly important to review the builder’s tender or quote (if included in the contract) and the builder’s special conditions, to ensure those do not undermine the protections to the property owner provided by the general conditions in the main body of the contract.

Builders will sometimes make promises in their marketing materials, but then put something different in the contract. 

A common issue is builders marketing that they can complete the works to an overly optimistic timeline, but including in the contract generous rights to extensions of time and rights to claim prolongation costs. 

Similarly, builders are entitled to be paid based on the level of progress they have achieved. Vague and sometimes even missing descriptions of progress stages is often an indication that the builder is seeking to give itself the opportunity to claim payments before the corresponding works have been completed – this is particularly the case where builders seek to front-load payments to the earlier stages of the works.

If you're still unsure whether your builder is above board, it's essential to investigate the builder’s reputation. 

Here are some valuable tips for property owners to assess a builder's reputation: 

Social media reviews are a great resource; many Facebook groups feature homeowners sharing their frustrations about poor building experiences. 

Additionally, checking online review services like Google reviews or ProductReview can provide insight into previous clients' experiences. 

When verifying a builder’s licence, you'll find their record, including any licence suspensions, disciplinary actions, tribunal or court orders, and public warnings. 

You should also confirm if the builder is a member of the Master Builders Association (MBA) or the Housing Industry Association (HIA), as this membership demonstrates a commitment to maintaining industry standards and, by extension, homeowner rights. For an added layer of safety, consider utilizing services that conduct independent background checks on credit history, court records, business activity, and histories of phoenix companies, such as those found at Buildcheck.com.au.

Be wary of builders who often present unrealistic offers significantly lower than others in the market. If a builder's offer seems too good to be true, it likely indicates that they are cutting costs - or excluding standard scopes of works and costs from their contract price - or may be circumventing regulations designed to protect homeowners. 

Under the Building and Constructions Commission Act 1991 (Qld), it is illegal for any building contractor to carry out building work without the necessary licence. 

You must not pay a deposit to a builder without seeing and verifying their licence.

How to check:

Verify your builder’s licence via the Queensland Building and Construction Commission’s database here.

Under the Building and Construction Commission Act 1991 (Qld), all builders must obtain Home Warranty Insurance on behalf of the property owner to cover the build. This applies to all projects valued over $3,300. 

Do not pay a builder a deposit without receiving a notice of cover for your Home Warranty Insurance.

The builder must provide you with the notice of cover within 10 business days of entering the contract or before work has commenced. 

The notice of cover confirms that the builder has taken out the insurance policy and has paid the initial premium. The property owner will then have to pay the insurance premiums as part of the contract.

This government backed scheme exists purely to insure property owners’ home. The scheme covers property owners when a builder does not or cannot finish the work required by contract. The policy also covers defective works that your builder refuses to cover. 

For more information time limits for cover and claims go here.

For more information regarding what is covered go here.

The standard policy will generally cover you up to $200,000, with some additional extras. You may wish to take out ‘optional additional cover’ to increase this to $300,000 at an additional premium. However, this must be done with 30 days of entering the contract or before work commences. 

How To Check: 

To verify that the policy has been taken out, search for your property here. 

All domestic building projects valued over $3,300 require a written building contract under the Building and Construction Commission Act 1991 (Qld). 

This act separates the requirements for building contracts into two categories based on the value of the contract. 

The Building and Construction Commission Regulation 2018 (Qld) has set price of the two categories as level 1 contracts between $3,300 to $20,000, and level 2 contracts above $20,000.

Level 1 Contracts ($3,301 to $19,999)

- Must be in writing, dated and signed by owner and Builder

- Must include:

• Clear description of the scope of work.
• Contract Price.
• Cooling off period for owner.
• Completion date or how it will be determined if unknown.
• Address of building site.

- Maximum Deposit for level 1 Contracts is 10% (20% if half of the work is done off site)

- Clear Payment and construction schedule. 

- Owner must be provided with a copy of sign contract to within 5 business days.

- Notice of Cover regarding Home Warranty Insurance.

Level 2 Contracts ($20,000 or more) 

Includes all requirements listed as level 1 contracts (unless otherwise specified) in addition to the following:

- Owner must receive QBCC Consumer Building Guide before signing.

- Must include start date as well as the completion date.

- Include implied/statutory warranties, including: 

• Materials are new and suitable
• Work complies with laws, plans and diligence.
• Finished product will be fit for occupation.
• Prime costs and provisional sums are estimated with care.

- Warranty Periods:

• 6 years for structural defects.
• 1 year for non-structural defects.

- If contract price is not fixed, the contract must state how it will be calculated, and include warnings for potential cost increases.

- Circumstances for time extensions such as:

• Unforeseeable delays beyond builder’s control
• Delays caused by the owner.
• Approved Variations.
• Contract must notify owner of delays not caused by the owner within 10 business days.

- Maximum Deposit for level 2 contracts is 5% of contract value.

NOTE: All warranties required to be included in level 2 contracts also apply to level 1 contracts but are not required to be in writing.

It is important to read your building contract and ensure that your fully understand what you are undertaking. Property owners must ensure that what they have agreed upon is outlined clearly in the general conditions of the contract. What should be included can often vary on a case-by-case basis, so if you are unsure about your contract do not risk your money and do your due diligence. 

A payment and construction schedule must be included in the building contract. These schedules will outline the payment and progression stages of your build. 

It is not uncommon for untrustworthy builders to claim they can finish builds in quicker time periods that what is possible, or include vague and unclear language about measuring progress and entitlement to payment. 

Other red flags include when a builder seeks to front-load most of the payments in the earlier stages of the build, or missing or inadequate descriptions of specific progress stages and the builder’s right to payment or extensions of time. 

Here are a few requirements under the Building Act 1975 (Qld):

• Building must be approved by a certifier before starting.
• There are mandatory inspection stages which cannot be bypassed: Footings/slab, Frame Stage and Final stage.
• Certifier must issue a final Form 21 – Final Inspection Certificate or Certificate of Occupancy once compliant.
• Only 10% of the contract price can be required for a deposit if contract is less than $20,000. Only 5% can be claimed if more than $20,000.
• A builder is only entitled to payment for what they have built up to the date of claiming payment.

If you are unsure about your payment or construction schedule, do not hesitate to ask your builder for clarification.

If you're still unsure whether your builder is above board, it's essential to investigate the builder’s reputation. 

Here are some valuable tips for property owners to assess a builder's reputation: 

Social media reviews are a great resource; many Facebook groups feature homeowners sharing their frustrations about poor building experiences. 

Additionally, checking online review services like Google reviews or ProductReview can provide insight into previous clients' experiences. 

When verifying a builder’s licence, you'll find their record, including any licence suspensions, disciplinary actions, tribunal or court orders, and public warnings. 

You should also confirm if the builder is a member of the Master Builders Association (MBA) or the Housing Industry Association (HIA), as this membership demonstrates a commitment to maintaining industry standards and, by extension, homeowner rights. For an added layer of safety, consider utilizing services that conduct independent background checks on credit history, court records, business activity, and histories of phoenix companies, such as those found at Buildcheck.com.au.

Be wary of builders who often present unrealistic offers significantly lower than others in the market. If a builder's offer seems too good to be true, it likely indicates that they are cutting costs - or excluding standard scopes of works and costs from their contract price - or may be circumventing regulations designed to protect homeowners. 

In accordance with the Building Services (Registration) Act 2011 (WA), Builders must not carry out building services without a valid registration. It is an offence for builders to advertise, state or imply that they are registered when they are not. 

Do not pay a deposit to a builder without first verifying that they are a registered builder. 

How to Check: 

To ensure that your builder is validly registered go here.

Under the Home Building Contracts Act 1991 (WA), builders must take out Home Indemnity Insurance on behalf of the Property Owner for all projects above $20,000. 

It is illegal for the builder to demand or receive a deposit/payment without having taken out a HII policy.

The builder must provide the property owner with a copy of the certificate of insurance prior to commencing work and receiving the initial deposit. 

DO NOT pay a deposit without receiving a copy of the certificate of insurance.

The Home Indemnity Insurance policy exists to protect homeowners for services and products provided throughout the building project. The policy will provide coverage when the builder cannot complete or rectify the project because the builder dies, becomes insolvent, or disappears. 

What is covered may vary based on the chosen insurance provider. The minimum coverage requirements according to the Western Australian Government are:

• Completion and rectification of defective work costs: up to $200,000.
• Loss of deposit: up to $40,000.
• Timeframe for claims: 6 years from ‘practical completion’ (i.e. when the project was or would have been reasonably completed).

After receiving a copy of the certificate of insurance verify your Home Indemnity Insurance with the respective insurance provider.

You may be able to verify it here with QBE Insurance’s online registry.

The Home Building Contracts Act 1991 (WA) applies to all contracts valued between $7,500 and $500,000. It sets out a number of requirements for contracts within that value range:

• Must be in writing, dated and signed by the builder and the owner prior to the commencement of work.
• Must contain all terms, conditions, and provisions of the agreement.
• Must include all plans, specifications, and related materials. This will include things like quotes, drawings, and tenders.
• Deposit limited to 6.5% of Contract Price.
• Detailed and clear scope of work.
• Clear and feasible construction and Payment Schedule.
• Builder is only owed payment for work performed and materials supplied (except for initial deposit).
• Variations must be in writing, signed by both parties and display the date of the variation.
• Must not include ‘rise and fall’ clauses.
• Contract price must be fixed.
• Builder cannot charge more based on cost increases in materials and delays. 
• Must include builder’s registration number.
• Home Indemnity Insurance details. 
• Clauses that state that the project will comply with all relevant building standards.
• Includes implied and statutory warranties. 

Contracts Valued over $500,000 are still bound by rules like the Builder’s registration requirement, written and dated by both parties, and scope of work.  

The construction and payment schedules are required for all building contracts and they detail the amount of money that is due at each stage of the build. Schedules with missing and ambiguous descriptions of the payment stages is often a red flag. 

Unscrupulous builders will commonly put the bulk of the payments in the earlier stages of the schedule. A builder is only entitled to receive payment for the work it has done and the materials it has supplied at the given point in time.

Untrustworthy builders will often say they can complete projects much quicker than feasible. Rights to claim additional time are a common indication of this.

If you are unsure about the payment schedule, or things do not seem right, ensure that you do your due diligence and question the builder. 

If you're still unsure whether your builder is above board, it's essential to investigate the builder’s reputation. 

Here are some valuable tips for property owners to assess a builder's reputation: 

Social media reviews are a great resource; many Facebook groups feature homeowners sharing their frustrations about poor building experiences. 

Additionally, checking online review services like Google reviews or ProductReview can provide insight into previous clients' experiences. 

When verifying a builder’s licence, you'll find their record, including any licence suspensions, disciplinary actions, tribunal or court orders, and public warnings. 

You should also confirm if the builder is a member of the Master Builders Association (MBA) or the Housing Industry Association (HIA), as this membership demonstrates a commitment to maintaining industry standards and, by extension, homeowner rights. For an added layer of safety, consider utilizing services that conduct independent background checks on credit history, court records, business activity, and histories of phoenix companies, such as those found at Buildcheck.com.au.

Be wary of builders who often present unrealistic offers significantly lower than others in the market. If a builder's offer seems too good to be true, it likely indicates that they are cutting costs - or excluding standard scopes of works and costs from their contract price - or may be circumventing regulations designed to protect homeowners. 

Under the Occupational Licensing Act 2005 (TAS), all builders who conduct, manage, or enter contracts regarding building work must hold the appropriate licence. In regard to residential buildings specifically, the Residential Building Work Contract and Dispute Resolution Act 2016 (TAS) requires all builders committing to contracts valued over $20,000 to have a valid licence. 

Do not engage an unlicenced builder, especially if your project is valued over $20,000. If there is no licence number on the contract do not sign. 

How to check

To ensure that your builder is properly licenced verify their licence through the Tasmanian Consumer, Building and Occupational Services (CBOS) public registry here. 

The Residential Building Act 2023, reintroduced the requirement of Home Warranty Insurance by amending the Residential Building Work Contracts and Dispute Resolution Act 2016. 

According to this amendment, the builder must take out Home Warranty Insurance on behalf of property owners before entering into or enforcing a residential building contract. 

Home Warranty Insurance must be obtained for all projects valued above $20,000 or more and is there to protect the homeowner. 

This insurance scheme covers property owners for incomplete and defective residential building work in the event that the builder dies, disappears, or becomes insolvent. The policy will cover structural defects for up to 6 years after completion, non-structural defects for up to 2 years, breach of statutory warranties and accommodation costs when the home is uninhabitable. Coverage will generally be limited to $200,000 or 20% of the contract price for incomplete work, $200,000 for structural defects and $20,000 for non-structural defects.

The Builder must provide the property owner with a certificate of insurance within 5 business days of signing the contract. 

However, we strongly recommend that you make sure this insurance is organised prior to signing the contract, as the policy must be organised prior to signing.

Once you have obtained the certificate of insurance, you should ensure that the policy complies with the mandatory requirements such as the minimum coverage requirements (at least $200,000), and coverage periods up to 2 and 6 years. The policy must be APRA-regulated and approved by the Tasmanian Government. 

How to check

Call the named insurance provider and verify that the policy has been taken out and is active. 

Under the Residential Building Work Contracts and Dispute Resolution Act 2016, all residential building work contracts valued over $20,000 must be in writing and signed by both parties. 

Here is a list of requirements and matters that should be included:

• The names of the builder, their company, the property owner.
• The builder's licence number.
• Description of work including the scope, and the progress and payment schedule (ensure that this part of the contract makes sense to you and is what you agreed upon when initially engaging the builder).
• The contract price.
• Ensure that the contract price is clear and that you understand the given method for calculating such. Deceptive builders will often make this section broad or unclear to confuse and exploit builders.
• The contract must include a mandatory 10 day cooling off period. 
• If the property owner choses to withdraw from the contract, the builder must return the deposit within 14 days.
• If the cooling-off period clause is missing, the owner can withdraw from the contract at any time before completion. 
• Clear start and completion dates. 
• The contract should include statutory warranties such as:
• Work will be done properly and skilfully. 
• Materials will be good and suitable. 
• Work will comply with laws and standards. 
• Work will be completed with reasonable diligence.
• A clause stating that all variations will be signed by both parties and in writing. 
• The insurance details should also be included in the contract.

Note: Prior to signing the contract the Builder must provide the home owner with the Residential Building Consumer Guide.

This guide is a good general guide on what is required and what homeowners should look for prior to signing their contract. 

The construction and payment schedules are required for all building contracts and they detail the amount of money that is due at each stage of the build. Schedules with missing and ambiguous descriptions of the payment stages is often a red flag. 

Unscrupulous builders will commonly put the bulk of the payments in the earlier stages of the schedule. A builder is only entitled to receive payment for the work it has done and the materials it has supplied at the given point in time.

Untrustworthy builders will often say they can complete projects much quicker than feasible. Rights to claim additional time are a common indication of this.

If you are unsure about the payment schedule, or things do not seem right, ensure that you do your due diligence and question the builder. 

If you're still unsure whether your builder is above board, it's essential to investigate the builder’s reputation. 

Here are some valuable tips for property owners to assess a builder's reputation: 

Social media reviews are a great resource; many Facebook groups feature homeowners sharing their frustrations about poor building experiences. 

Additionally, checking online review services like Google reviews or ProductReview can provide insight into previous clients' experiences. 

When verifying a builder’s licence, you'll find their record, including any licence suspensions, disciplinary actions, tribunal or court orders, and public warnings. 

You should also confirm if the builder is a member of the Master Builders Association (MBA) or the Housing Industry Association (HIA), as this membership demonstrates a commitment to maintaining industry standards and, by extension, homeowner rights. For an added layer of safety, consider utilizing services that conduct independent background checks on credit history, court records, business activity, and histories of phoenix companies, such as those found at Buildcheck.com.au.

Be wary of builders who often present unrealistic offers significantly lower than others in the market. If a builder's offer seems too good to be true, it likely indicates that they are cutting costs - or excluding standard scopes of works and costs from their contract price - or may be circumventing regulations designed to protect homeowners. 

If you are uncertain about your builder or their proposed contract, don't take any chances. It is essential to understand your rights as the homeowner and ensure that your builder and contractual arrangements are transparent and protective of your interests. 

At Build Right Construction Lawyers, we provide residential construction advice, including building contract reviews, negotiation support, and expert guidance at a fixed price. We will ensure that your contract safeguards your rights and provides you with the best possible contractual arrangements. Don’t risk it (and avoid relying on untrained AI): let us review your contract for you.

Under the Building Work Contractors Act 1995 (SA), builders must be licenced for most building domestic building works. 

Builders who conduct unlicenced building work will be subject to significant penalties of up to $150,000 for individuals and $550,000 for companies, following the 2025 reforms. 

When it comes to projects valued above $20,000 you must never engage an unlicenced builder. 

Section 28 of the Building Work Contractors Act 1995 specifically requires Building Contractors to display their licence number on building contracts. Therefore, if a builder does not display their Licence number on the contract, do not sign it. 

How To Check

Ensure that your builder is properly licenced through the State Government’s Consumer and Business Service database here. 

Under the Building Work Contractors Act 1995 (SA), all building projects valued above $20,000 require Building Indemnity Insurance. This is important for all building projects, as it serves to protect the homeowner.

The builder must organise and pay for the policy prior to commencing work on the project. The builder must also provide the a copy of the certificate of insurance to the homeowner. 

If the builder has not provided you with this certificate do not allow them to commence work.

Building Indemnity Insurance provides coverage for incomplete and defective work that requires rectification when the builder dies, disappears, or becomes insolvent. Claims regarding defective work can generally be made up to 5 years after completion, however homeowners should check their policy to confirm. 

Following recent amendments these insurance policies will insure homeowners up to $250,000. 

Obtaining building insurance is extremely important for homeowners and exploitative builders will often try to avoid this to cut costs and bypass regulations. 

How to check

Once the Builder provides you with a copy of the certificate of insurance, you should verify it with the given insurer. 

The main insurance providers for this are QBE Insurance and Assetinsure, with AB Philips providing insurance for spas, pools, and landscaping. 

• If your provider is QBE Insurance, verify your policy with their certificate register here.
• If your provider is Assetinsure, verify your policy here.

The Building Work Contractors Act 1995 (SA) requires all building projects valued above $20,000 to have written contracts. 

Here is a general list of requirements and things to look for with building contracts: 

1. The contracts must be clear and legible.
2. Builder's name, business name, and licence number. 
3. Signature of builder and property owner.
4. All relevant planning approvals.
5. Clauses which detail the contract price:

• Fixed price lump sum (Most common) – cost price is fixed, and price variations must be approved by the property owner.
• Rise and fall clauses – contract price can rise and fall and is subject to fluctuations in material and labour costs. Ensure that you check for these clauses and understand how they work.
• Cost Plus – the builder will include the cost to builder and add their profit margin to this cost. In South Australia this is limited to 15%. 

1. Copy of Building Indemnity Insurance Certificate (as mentioned before).
2. A 5-day cooling off period - under Building Work Contractors Act 1995 (SA), 5-day Cooling off period must be included, and a building owner can back out of contract within 5 days after signing with a written notice.
3. Progress and Payment Schedule of project, including start and completion dates. This should also include the details of your project, ensure that they are what you agreed upon. 
4. A clause explaining that the work will comply with approved plans, specifications and building requirements imposed during the approval process. 
5. Clauses explaining contract variations, ensure that you understand how the contract may be varied throughout the project.
6. Statutory Warranties, section 32 of the Building Work Contractors Act 1995 (SA) implies a range of warranties into all domestic building work contracts such as:

• The building work will be carried out in accordance with accepted trade standards and according to the agreed plans and specifications.
• The materials will be ‘good and proper.’
• The building work will be carried out in accordance with statutory requirements.
• The building work will be carried out with reasonable diligence.
• The house will be fit for human habitation.
• The building will be suitable for the purpose for which it is being built, as long as the purpose was made known to the builder.

The progress and payment schedule is an extremely important part of all building projects. This outlines the start and completion dates, the construction stages and how much is due for payment at each stage. 

Some builders may seek to front load this schedule to confuse and exploit homeowners. 

Missing progression stages, unclear language, unrealistic completion times are also common red flags. 

It is very important that this schedule corresponds with what you agreed upon and is feasible to achieve. 

This payment schedule will also often outline the deposit, it is important to know that the Building Work Contractors Regulations 2011 (SA) limits deposits to 5% of the projects value. 

This limit is for all projects valued over $20,000, whereas deposits for projects under $20,000 should only be $1,000. 

Therefore, if the deposit is more than 5% of the value of the project for contracts over $20,000, do not pay it. 

Important: A builder is only ever owed for the work he has done up to that point in time, do not pay for work that has not been done (other than the deposit).

If you're still unsure whether your builder is above board, it's essential to investigate the builder’s reputation. 

Here are some valuable tips for property owners to assess a builder's reputation: 

Social media reviews are a great resource; many Facebook groups feature homeowners sharing their frustrations about poor building experiences. 

Additionally, checking online review services like Google reviews or ProductReview can provide insight into previous clients' experiences. 

When verifying a builder’s licence, you'll find their record, including any licence suspensions, disciplinary actions, tribunal or court orders, and public warnings. 

You should also confirm if the builder is a member of the Master Builders Association (MBA) or the Housing Industry Association (HIA), as this membership demonstrates a commitment to maintaining industry standards and, by extension, homeowner rights. For an added layer of safety, consider utilizing services that conduct independent background checks on credit history, court records, business activity, and histories of phoenix companies, such as those found at Buildcheck.com.au.

Be wary of builders who often present unrealistic offers significantly lower than others in the market. If a builder's offer seems too good to be true, it likely indicates that they are cutting costs - or excluding standard scopes of works and costs from their contract price - or may be circumventing regulations designed to protect homeowners. 

If you are uncertain about your builder or their proposed contract, don't take any chances. It is essential to understand your rights as the homeowner and ensure that your builder and contractual arrangements are transparent and protective of your interests. 

At Build Right Construction Lawyers, we provide residential construction advice, including building contract reviews, negotiation support, and expert guidance at a fixed price. We will ensure that your contract safeguards your rights and provides you with the best possible contractual arrangements. Don’t risk it (and avoid relying on untrained AI): let us review your contract for you.