For a building project of any size or scale, it is extremely important to have a written contract in place before building begins. The combination of good communication and a detailed written building contract will provide you the best chance of avoiding disputes during building. If a dispute does arise, the contract will set out with how the dispute may be resolved.
Common issues that may arise during the process of signing a contract include:
How costs for preliminary costs will be managed;
Deposits and progress payments;
How prime cost items and provisional sums are dealt with;
Extensions of time; and
Managing the practical completion stage and final payment.
We recommend that you discuss each of these issues with your builder prior to signing the contract. You may¬†also ask questions of Master Builders ACT or your legal advisor.
A contract may be in a number of forms, however to make the process easier, Master Builders has¬†developed a number of industry-standard contracts which are available for purchase by your builder from the¬†Master Builders office.
A brief description of each of the suite of contracts sold at the Master Builders office is shown below:
ACT Home Building Contract
This is a lump sum contract for residential building work in the ACT.
BC4 NSW Home Building Contract
Lump sum contract for new houses, major residential renovations or small multi unit developments with¬†no architect supervision.
Cost Plus Residential
Head contract for work undertaken on a cost plus fixed fee or percentage margin basis.
Minor Works ACT
This contract is suitable for works where the value of the work is less than or in the region of $50,000.¬†Two copies of this contract must be issued and signed by both parties, one for the contractor and the¬†other for the owner.
Minor Works NSW
For small residential projects. Especially suited to jobs under $20,000 which do not require home¬†warranty insurance.
Standard NSW Housing Specification of construction requirements, including a Schedule of fittings,¬†fixtures and finishes.
Lump sum contract for Commercial/ industrial projects with no architectural administration.
PM2- Project Management Contract (ACT)
This contract is for a Project Manager who acts in a Management role as an agent of the Principal¬†during more than one Phase of a project (usually design and construction phases) organising and¬†administering the delivery of a project by contracts between the principal and design consultants,¬†construction contractors or trade contractors.
CM1- Construction Management Contract
For construction management services for use in non- residential building projects.
TC/ CM1- Sub Contract Trade Contract
Contract between Trade and Contractor and Principle.
CPC - Cost Plus Contract NSW Commercial
For commercial work undertaken on a cost plus fixed fee or percentage margin.
PM2 - Project Management Contract (NSW)
Contract between project manager and principal for use in non- residential building projects.