GUIDES FOR HOMEOWNERS

---

• Under the Home Building Act 1989 (NSW), it is illegal to undertake residential building work valued above $5,000 without a license. This extends to all types of tradespersons conducting specialised work. 

• Do not sign a contract or pay a deposit to a builder without verifying their license.

How to Check:

• Ensure your builder is properly licensed by checking the NSW Fair Trading’s database here. 

• HBCF insurance exists for the property owners’ benefit. It insures you for the cost of rectifying defective and unfinished work if the builder goes insolvent, dies or disappears (up to a monetary cap, presently set at $340k). 

• The policy also covers property owners if a builder fails to pay any tribunal/court ordered compensation in favour of the homeowner. 

• All builders must a obtain HCBF insurance policy on behalf of homeowners for all work valued above $20,000, as per section 92(1) of the Home Building Act 1989 (NSW). 

• The Builder must provide the property owner with a certificate of insurance under section 92(1)(b) of the Home Building Act 1989. 

• Under section 92(2) of the Home Building Act 1989, the builder is not permitted to request or receive a deposit without obtaining first insurance and presenting a copy of the certificate of insurance to the homeowner.

• Untrustworthy builders will not arrange this HBCF insurance to avoid inflating costs and keep things off the book. Builders with poor track records will often be denied insurance making it impossible to legally build, and serves as another reason why they may not obtain insurance. It is vital that you ensure this insurance is in place before you permit the builder to start working and before paying the builder any money. 

How to verify your builder’s insurance certificate of currency:

To verify that your HBCF insurance is valid, check it here.

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. All building projects above $5,000 require a written contract.

• The Home Building Regulations 2014 also set requirements for small contracts between $5,000 to $20,000, and large contracts above $20,000. 

Requirements for contracts for greater than $20,000:

• Name(s) and license Number(s) of Contractor(s).
• Clear Description of Work. 
• All the necessary plans and specifications.
• Contract price.
• A clause that expressly confirms 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 that were not made by the contractor. This is commonly referred to as the "work compliance clause.”
• A clause that limits the contractor’s liability against designs and specifications required by the owner which breach the ‘work compliance clause.’ 
• A prominently displayed contract price and 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 (s 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. Followed by a caution to the owner if they are unable to complete it. 
• A clause regarding certifier selection.
• It is important to review the builder’s quotes and tenders (if included) to make sure they match the description and special conditions. This will ensure that the contract does not undermine the property owner’s unique specification. 
• The 17-item checklist is also a great guide for homeowners and should be completed and taken seriously, particularly for large contract 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 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. These schedules are important as they set out the payment and progression stages of your contract. Builders are only entitled to be paid based upon them having finished building each stage.

Common indicators of a questionable builder include:

• the bulk of the payments are included the in the early stages of the schedule; 
• unclear or incomplete descriptions of the progress stages (often an indication that the builder may try to claim payments before the work is finished); and
• suggestions by the builder 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:

• Check the payment and construction schedule, which must be contained in the contract. Ensure that it aligns with the agreed commencement date, construction period, and does not contain ‘rights to additional time and fees.’ 
• Also check that the schedule corresponds with what you agreed upon and that payments are not front loaded. 

If your builder is not open about their payment or construction schedule or becomes adversarial when you ask them about it, be prepared to walk away, as that is a red flag.

If you are still unsure whether your builder is above board, then you may want to look into the Builder’s reputation. Listed below are ways in which Property owners can get an idea on a builder’s reputation:

• Social media reviews, there are many Facebook groups where homeowners voice their frustrations on poor building experiences.
• Check online review services Google reviews or ProductReview. 
• When checking a builder’s licence, it will show their record including all licence suspensions, disciplinary actions, tribunal/court orders, and public warnings.
• Check the iCRT registry of trustworthy builders here. This registry grades builders and tradespersons based on financial stability, project history and overall building compliance.
• You can see if the builder is a member of the Master Builders Association (MBA) or the Housing Industry Association (HIA). This demonstrates commitment to maintaining industry standards.
• You can also use services which do independent background checks on credit history, court record, business activity and history of phoenix companies. You can do this at Buildcheck.com.au.
• Untrustworthy builders will commonly make unrealistic offers that are much lower than other than what others have offered. 

If the builder's offer seems too good to be true, it probably is. This is a common indication that the builder is cutting costs and avoiding regulations that are in place to protect homeowners. This is illustrated where builders attempt to give themselves the right to impose mark ups and additional time, through invalid contractual clauses.

If after reading this you are still unsure about your builder or contract, do not risk it. 

It is extremely important to ensure that your builder and contractual arrangements are all above board and protect you.

At Build Right Construction Lawyers, we can review your contract, provide advice and negotiation support at a fixed price. We will ensure that your contract protects you and gives you the best possible contractual arrangements.

Don’t risk it (and don't rely on untrained AI): we'll review your contract for you.

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

• Operating without a licence is illegal and you absolutely should not pay any money to an unlicenced builder, no matter what offers the builder makes to incentivise you.

How to Check:

• Ensure your builder is properly licensed by checking the BPC's database here. 

• All builders must obtain Home Warranty Insurance (HWI) in accordance with the Building Act 1993 and the Domestic Building Contracts Act 1995. 

• DBI exists for the property owners’ benefit, as it gives you an avenue to pursue if the builder fails to rectify defects or complete works. It’s common for builders to itemise and pass on the cost of HWI insurance directly to the property owners, without applying a mark-up. 

• Unscrupulous builders often try to avoid the cost of taking out insurance and you should take any suggestion from a builder that insurance is not required as a big warning sign. 

• The recent Building Legislation Amendment (Domestic Building Insurance New Offences) Act 2024 has made it an offence for builders to demand and/or receive a deposit for a build without insurance. This law applies to all projects over $20,000. 

• For more information regarding what will be covered Click 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.
• DBI certificate.

While these are 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.

• Some builders will make grandiose promises in their marketing materials, but then put something materially different in the contract. 

• A common issue is builders marketing that they can complete the works more quickly than what is feasible, then build into their construction schedule various extensions and rights to claim additional time. 

• 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.

What to do:

• Check the commencement date, construction period and progress payment schedule contained in the draft contract. 

• You should ensure what is written aligns with what you think you are engaging the builder to deliver.

If you are still unsure whether your builder is above board, then you may want to look into the builder’s reputation. 

Here are some ways in which you can do that:

• Social media reviews, there are many Facebook groups where homeowners voice their frustrations on poor building experiences.

• Check online review services Google reviews or ProductReview. 

• When checking a builder’s licence, it will show their record including all licence suspensions, disciplinary actions, tribunal/court orders, and public warnings.

• You can see if the builder is a member of the Master Builders Association (MBA) or the Housing Industry Association (HIA). This demonstrates commitment to maintaining industry standards.

• You can also use services which do independent background checks on credit history, court record, business activity and history of phoenix companies. You can do this at Buildcheck.com.au.

• Ask your builder for the contact details of past customers and ask those people about their experience with the builder.

Untrustworthy builders will commonly make unrealistic offers that are much lower than other than what others have offered. 

If the builder's offer seems too good to be true, it probably is. This is a common indication that the builder is cutting costs and avoiding regulations that are in place to protect homeowners. 

If after reading this you are still not completely sure about your builder or contract, do not risk it. 

It is extremely important to ensure that your builder and contractual arrangements are all above board and protect you.

At Build Right Construction Lawyers, we can review your contract, provide advice and negotiation support at a fixed price. We will ensure that your contract protects you and gives you the best possible contractual arrangements.

Don’t risk it (especially with untrained AI): we'll review your contract for you.

• 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. 

• Do not pay a deposit to a builder without 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, see here.

• For more information regarding what is covered, see 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 you may wish to do an insurance search on your home 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.

For level 2 Contracts ($20k and above)

• Must be in writing, dated and signed by owner and Builder.
• 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
• 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.
• Owner must receive QBCC Consumer Building Guide before signing.
• Must include start date in addition to 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.
• 6 year warranty period for structural defects.
• 1 year warranty period for non-structural defects.
• If contract price is not fixed, the contract must contain 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; or approved Variations.
• Contractor 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.

It is important to read your building contract and ensure that your fully understand what you will commit too. 

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. 

• Some untrustworthy builders will promise they can finish builds in quicker time periods that what is possible, to entice you. Deceptive builders will often 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. 

Under the Building Act 1975 (Qld):

• The 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.
• A builder is only entitled to what they have built up to the date of claiming payment.

If you are unsure about your Payment and Construction schedule, do not hesitate to query your builder. If they demand a deposit higher than what they are entitled to receive, or want to front load the payments avoid them. 

If you are still unsure whether your builder is above board, then you may want to look into the builder’s reputation. 

Here are some ways in which you can do that:

• Check the Queensland Building and Construction Commission registry to check the builder’s disciplinary history here.

• Social media reviews: there are many Facebook groups where homeowners voice their frustrations on poor building experiences.

• Check online review services Google reviews or ProductReview. 

• When checking a builder’s licence, it will show their record including all licence suspensions, disciplinary actions, tribunal/court orders, and public warnings.

• You can see if the builder is a member of the Master Builders Association (MBA) or the Housing Industry Association (HIA). This demonstrates commitment to maintaining industry standards.

• You can also use services that perform paid checks on credit history, court record, business activity and history of phoenix companies. You can do this at Buildcheck.com.au.

• Ask your builder for the contact details of past customers and ask those people about their experience with the builder.

Untrustworthy builders will commonly make unrealistic offers that are much lower than other than what others have offered. 

If the builder's offer seems too good to be true, it probably is. This is a common indication that the builder is cutting costs and avoiding regulations that are in place to protect homeowners. 

If after reading this you are still not completely sure about your builder or contract, do not risk it. 

It is extremely important to ensure that your builder and contractual arrangements are all above board and protect you.

At Build Right Construction Lawyers, we can review your contract, provide advice and negotiation support at a fixed price. We will ensure that your contract protects you and gives you the best possible contractual arrangements.

Don’t risk it (especially with untrained AI): we'll review your contract for you.

• 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 unlawful 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 HII 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).

What to do

• After receiving a copy of the certificate of insurance verify it 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. 

The Act has set out a number of requirements for contracts of that value:

• The contract must be in writing, dated and signedby 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 must be 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 – all contract 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, in the sense that the builder cannot charge more based on cost increases in materials and delays. 
• Must include builder’s registration number.
• Clauses which 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.  
• These contracts often require more than what is required under normal domestic building contracts. 

• The construction and payment schedule are required for all building contracts and details each progression and payment stage of the build. Schedules with missing and ambiguous stages is often a sign that the builder is either low quality or just exploitative. 

• Some untrustworthy builders will promise they can finish builds in quicker time periods that what is possible, to entice you. Deceptive builders will often 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. 

Under the Building Act 1975 (Qld):

• The 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.
• A builder is only entitled to what they have built up to the date of claiming payment.

If you are unsure about your Payment and Construction schedule, do not hesitate to query your builder. If they demand a deposit higher than what they are entitled to receive, or want to front load the payments avoid them. 

If you are still unsure whether your builder is above board, then you may want to look into the builder’s reputation. 

Here are some ways in which you can do that:

• Social media reviews: there are many Facebook groups where homeowners voice their frustrations on poor building experiences.

• Check online review services Google reviews or ProductReview. 

• When checking a builder’s licence, it will show their record including all licence suspensions, disciplinary actions, tribunal/court orders, and public warnings.

• You can see if the builder is a member of the Master Builders Association (MBA) or the Housing Industry Association (HIA). This demonstrates commitment to maintaining industry standards.

• You can also use services that perform paid checks on credit history, court record, business activity and history of phoenix companies. You can do this at Buildcheck.com.au.

• Ask your builder for the contact details of past customers and ask those people about their experience with the builder.

Untrustworthy builders will commonly make unrealistic offers that are much lower than other than what others have offered. 

If the builder's offer seems too good to be true, it probably is. This is a common indication that the builder is cutting costs and avoiding regulations that are in place to protect homeowners. 

If after reading this you are still not completely sure about your builder or contract, do not risk it. 

It is extremely important to ensure that your builder and contractual arrangements are all above board and protect you.

At Build Right Construction Lawyers, we can review your contract, provide advice and negotiation support at a fixed price. We will ensure that your contract protects you and gives you the best possible contractual arrangements.

Don’t risk it (especially with untrained AI): we'll review your contract for you.

• Under the Occupational Licensing Act 2005 (TAS), all builders who conduct, manage, or enter contracts regarding building work must hold the appropriate license. 

• 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 license. 

• Do not engage an unlicensed builder, especially if your project is valued over $20,000. 

How to check

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

• The recent 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 defect 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. 

• 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 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 builders License number.

• Description of work including the scope, and the progress and payment schedule. 

• It is important to make sure that this part of the contract makes sense 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.

• 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 this is 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; and work will comply with laws and standards. 

• 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 is a good general guide on what is required and what homeowners should look for prior to signing their contract. The onus is ultimately on the homeowner to understand the contractual obligations prior to signing the contract. 

• The progress and payment schedule is an extremely important part of all building projects. This outlines the start and completion dates, the constructions stages and how much is due for payment at each stage. Deceptive builders will often distort or 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. If something does not make sense with this schedule it can often be the signs of an unscrupulious builder. 

• Additionally, for contracts over $20,000, the builder cannot request or receive a deposit of more that 5% of the contract price. 

• 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 unless it is a deposit. If a payment and progress schedule seem unfeasible it or unclear do not risk, it and get advice. 

If you are still unsure whether your builder is above board, then you may want to look into the builder’s reputation. 

Here are some ways in which you can do that:

• The South Australian Government maintains a Public Assurances Register that lists businesses with official warnings and concerns about their work. This also has a wide range of brochures and research to look into. You can access this here.

• Social media reviews: there are many Facebook groups where homeowners voice their frustrations on poor building experiences.

• Check online review services Google reviews or ProductReview. 

• When checking a builder’s licence, it will show their record including all licence suspensions, disciplinary actions, tribunal/court orders, and public warnings.

• You can see if the builder is a member of the Master Builders Association (MBA) or the Housing Industry Association (HIA). This demonstrates commitment to maintaining industry standards.

• You can also use services that perform paid checks on credit history, court record, business activity and history of phoenix companies. You can do this at Buildcheck.com.au.

• Ask your builder for the contact details of past customers and ask those people about their experience with the builder.

Untrustworthy builders will commonly make unrealistic offers that are much lower than other than what others have offered. 

If the builder's offer seems too good to be true, it probably is. This is a common indication that the builder is cutting costs and avoiding regulations that are in place to protect homeowners. 

If after reading this you are still not completely sure about your builder or contract, do not risk it. 

It is extremely important to ensure that your builder and contractual arrangements are all above board and protect you.

At Build Right Construction Lawyers, we can review your contract, provide advice and negotiation support at a fixed price. We will ensure that your contract protects you and gives you the best possible contractual arrangements.

Don’t risk it (especially with untrained AI): we'll review your contract for you.

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

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

• For projects valued above $20,000 you must never engage an unlicensed builder. 

• Section 28 of the Building Work Contractors Act 1995 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 

• Before committing to any building contract, ensure that your builder is properly licensed 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 insurance policy is very important for all building projects as 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 copy of 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. Do not engage a builder who fails or refuses to obtain Building Indemnity Insurance. 

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. 

The below is a general list of requirements for compliant building contracts: 

• The contract must be clear and legible.

• Builder's name, business name, and license number. 

• Signed by both the builder and property owner.

• All relevant planning approvals.

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.
• Ensure that you check for 'rise and fall' clauses – these make the contract price subject to fluctuations in material and labour costs. 
• 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. 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.

1. 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. 

1. A clause explaining that the work will comply with approved plans, specifications and building requirements imposed during the approval process. 

1. Clauses explaining contract variations, ensure that you understand how the contract may be varied throughout the project.

1. 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 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.

This above is a general list of things to look for when entering into building contracts, however, this can vary from a case-to-case basis as different projects require different things. 

The onus is on the homeowner to understand their obligations and whether the contract is right for them.

• The progress and payment schedule is an extremely important part of all building projects. This outlines the start and completion dates, the constructions stages and how much is due for payment at each stage. Deceptive builders will often distort or 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. If something does not make sense with this schedule it can often be the signs of an unscrupulious builder. 

• 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. 

• 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 unless it is a deposit. If a payment and progress schedule seem unfeasible it or unclear do not risk, it and get advice. 

If you are still unsure whether your builder is above board, then you may want to look into the builder’s reputation. 

Here are some ways in which you can do that:

• The South Australian Government maintains a Public Assurances Register that lists businesses with official warnings and concerns about their work. This also has a wide range of brochures and research to look into. You can access this here.

• Social media reviews: there are many Facebook groups where homeowners voice their frustrations on poor building experiences.

• Check online review services Google reviews or ProductReview. 

• When checking a builder’s licence, it will show their record including all licence suspensions, disciplinary actions, tribunal/court orders, and public warnings.

• You can see if the builder is a member of the Master Builders Association (MBA) or the Housing Industry Association (HIA). This demonstrates commitment to maintaining industry standards.

• You can also use services that perform paid checks on credit history, court record, business activity and history of phoenix companies. You can do this at Buildcheck.com.au.

• Ask your builder for the contact details of past customers and ask those people about their experience with the builder.

Untrustworthy builders will commonly make unrealistic offers that are much lower than other than what others have offered. 

If the builder's offer seems too good to be true, it probably is. This is a common indication that the builder is cutting costs and avoiding regulations that are in place to protect homeowners. 

If after reading this you are still unsure about your builder or contract, do not risk it. It is extremely important to ensure that your builder and contractual arrangements are all above board and protect you.

At Build Right Construction Lawyers, we can review your contract, provide advice and negotiation support at a fixed price. We will ensure that your contract protects you and gives you the best possible contractual arrangements.

Don’t risk it: we'll review your contract for you.