Home building and construction contracts

Here at Douglas Cheveralls Lawyers, we have a wealth of experience in carefully reviewing contracts and explaining the terms to you in plain English to ensure that you understand the risks associated with building a home.

What can I expect in a contract to build a house?

In Western Australia, if a build is valued between $7,500 and $500,000 it is common practice for a builder to use a version of the “Lump Sum Building Contract”, which is an industry standard provided by the Housing Industry Association (“HIA”).

One of the key advantages of using the Lump Sum Building Contract is that it provides certainty for both the client and the builder. The client knows exactly what they will be paying as the contract is for a fixed amount, and the builder knows exactly what they will be required to deliver. However, if the scope of work changes during the course of the project, the price may also change.

That being said even if a HIA precedent is used, it can and is often amended. Understanding the effects of these changes is incredibly important.

It is also critical that the contract is reviewed by a professional to ensure that it aligns with the legislative requirements established under the Home Building Contracts Act 1991 (see below).

It is advisable that you engage a lawyer to review the contract to ensure you understand your rights as well as ensuring you are aware of the potential risks that could arise.

Are there any laws to protect me?

Any contract for home building or associated work between $7,500 and $500,000 within Western Australia is subject to the Home Building Contracts Act 1991. This Act not only applies to the construction of new homes, but also some renovations and alterations of existing homes.

The Act sets out the rights and responsibilities of builders and homeowners, for example this includes:

What information builders must provide at key stages of the build;
Deadlines to complete milestones within the contract (for example commencing the build), and the implications when they are not met;
Steps to take if either you or the builder wish to vary the contract;
Insurance requirements; and
What payments you are required to make and when.

The aim of the Act is to ensure that when you engage someone to build you home that it is built in a timely and professional manner. Understandably, it is in your best interest to ensure the contract to sign aligns with the Act. However, if this doesn’t happen it is important that you understand your rights and what next steps you should take.

How can Douglas Cheveralls Lawyers help you?

Whether you are conducting your due diligence before signing a contract to build a house, you want to understand your rights under such a contract, or you want to know the effect of terminating the contract early, we here at Douglas Cheveralls Lawyers can help.

Our extensive experience with contracts to build homes allows us to analyse your situation efficiently and provide you with real world steps you can take to resolve problems that arise.