As building contracts can be complex, we recommend you get a building lawyer to review your building contract before you sign – even though this will affect your cooling-off rights- Use independent technical experts to check your building documentation is complete, correct and meets your expectations – for example, a building lawyer, a building surveyor, an independent building consultant
- Never sign any documents under pressure
Large building companies typically offer their building services based on display homes. The process seems easy and affordable – the company has plans and a building process, and they can get your permits.
A building lawyer can help you understand and negotiate the contract, which is a complex legal document. Note that getting legal advice before you sign means you no longer have five days to change your mind (cool off) after signing the contract.
View our Getting out of a building contract checklist page.
Check out display homes
Display homes come in a range of models, sizes and prices, so shop around to make sure you get the home that best suits your needs. Be aware that the display home you visit may not be the standard model.
- If you choose to build a replica of the display home you visit, your contract must include the home’s exact plans and specifications.
- If customising the plans, get the exact cost of building the home as displayed, and the cost with your changes included – so you can determine if they are worth the extra money. Make sure any changes are specified in writing, not just included in the plans.
- If you agree to cheaper fixtures and fittings than you see in the display home, make sure you fully understand what you are getting (and what you are agreeing to do without).
- Remember – it can be expensive to change the standard plan and add optional extras after you’ve signed a contract.
Get your own building team
Large building companies have a team of skilled professionals, including lawyers, surveyors, designers and tradespeople. You may also choose to engage industry professionals to independently advise and assist you during the building project. Such professionals can include:
- building lawyer – to help you understand and negotiate the contract. Seeking independent legal advice can protect you, even though it means you no longer have five days to change your mind (this is called 'cooling off' – View our Getting out of a building contract checklist page). The Law Institute of Victoria can help you find an independent building lawyer
- building surveyor – to check building work meets the minimum standards of the building regulations. You are free to appoint a private building surveyor of your choice. A builder who enters into a major domestic building contract, or a person who acts as a domestic builder for building work, must not appoint a private building surveyor on your behalf. You can engage a municipal building surveyor or you can search for a private building surveyor on the Appointing a building surveyor page of the Victorian Building Authority website.
You may also choose to engage an independent building consultant, who can make sure the plans suit your specific needs and check the quality of work during construction.
A competent consultant will also be able to provide the building lawyer with a technical understanding of the building project. Search for building consultants online or in the telephone directory. Check they are qualified and experienced in the type of work you are undertaking (for example, two-storey, timber-framed construction), and have insurance that will cover you for the type of work they are doing.
Understand pre-construction contracts
Your builder must obtain a soil report and foundation data to design the footings and to give you an adequate estimate of the cost. They may ask you to sign a document to authorise this.
However, if the pre-construction contract includes design or specification work, obtaining permits or other building work, it is a building contract.
If a contract includes domestic building work and the price is more than $10,000:
- it is a major domestic building contract (view our Building contracts checklist page)
- you have rights under the Domestic Building Contracts Act 1995
- you have rights under the Australian Consumer Law regardless of the contract amount.
We recommend you get legal and technical advice before you sign, even though it means you no longer have five days to change your mind (view our Getting out of a building contract checklist page). If the document includes developing the design or drawing plans and specifications, due to copyright you may not be able to use these if you proceed with a different builder. You also may not get a refund on the cost of developing these plans.
Control your costs
- Select your fixtures and fittings and make sure they are specified in the contract. View our Building contracts checklist page.
- Where possible, avoid including fixtures and fittings in the contract that are not specified, for example, by model or make; and items with an unknown price. These ‘prime cost items’ and ‘provisional sum items’ can blow your budget and cause delays.
- Make sure any variations to the contract are agreed in writing with your builder.
- A builder must obtain foundation data (from the soil report) to give you an accurate price. They use it to work out the depth of stumps, type of slab or strip footing required. You should not have to pay extra later for additional work that the builder should have foreseen from the foundation data.
- Pay for progress: you pay a specific amount for each completed stage of building – usually base, frame, lock-up and fixing – but only pay if you are satisfied the work is complete. View our Paying for building work checklist page.
House and land packages
House and land packages generally involve at least two contracts – one to buy the land and one to build the house. House and land packages can be very complex so we recommend you get a building lawyer to review your building contract before you sign – even though it means you no longer have five days to change your mind (this is called 'cooling off' – view our Getting out of a building contract checklist page).
Building can only start when the plan of subdivision is registered (meaning the title on the property is created).
You have the right to cancel the sale contract for the land if your subdivision is not registered within 18 months of signing (the default period), or by a date specified in the sale contract. Your building contract normally mirrors this date. Make sure any agreement enables you or your builder to end the building contract after this period has passed.
Make sure your building lawyer checks that your obligations under the building contract do not start until registration has occurred. If registration is delayed, you could be charged for the delays and the builder could end the contract.