Things you must check before signing a build contract.
Building a new home is one of the most rewarding and exciting experiences in life, provided you select the builder that best meets your needs. Select the wrong builder and you might end up in a frustrating and expensive learning curve.
This blog will help you identify things you need to consider before signing a build contract to ensure that you are choosing the correct builder for you.
PART 1 – Checking the Builder
Is your builder qualified to build your house?
It is always important to check the builder’s licence and licence type before signing a build contract to ensure that they are, infact qualified and have the correct level of insurance to be building your home. In Queensland, you can check a builder’s license here. Built Easy only work with a panel of qualified residential home builders.
Is your builder insured?
It is vital that your builder is registered to provide the building indemnity scheme that insures your home for six years. In Queensland, the body that administers the insurance is the Queensland Building and Construction Commission (QBCC).
As part of the building process, the builder pays a premium to QBCC to insure the construction. The amount is included as part of your contract, and is paid before work begins.
It may protect you where:
- a licensed builder does not complete the contracted residential construction work and you have terminated the contract
- the contractor fails to rectify defective work
- the building suffers from subsidence or settlement.
Should QBCC pay out on a claim, QBCC would pursue the builder to recover the claim amount.
- Structural Defective Work – The owner can lodge a complaint within 6 years 3 months from when the work is completed and within 12 months of noticing the defect.
- Non-structural Defective Work – the builder provides a 6-month statutory warranty from the date of practical completion for non-structural defects. Typically, this is part of the contract conditions for new home construction. If the owner notices a defect within the first 6 months, they can request (in writing), that you fix the defect. If the defect is not fixed after 6 months (the expiration of the warranty period), the owner can lodge a complaint with QBCC and must be lodged no later than 12 months from completion of the work
It is also important to know if your builder has ever had any history of bankruptcy, current building disputes, how long have they been in business. Doing a QBCC licence search allows you to see all of this information about a builder.
Do you have a point person when construction starts?
Is there someone in the builder’s office who will be your liaison once construction begins? Is there someone who will be updating you on progress, and letting you know when invoices need to be paid, sending you pictures and keeping you up to date?
Having confidence and trust in your builder is absolutely essential prior to signing a contract. At Built Easy, all of our builders have been carefully vetted by our experienced team, each having an excellent reputation and proven workmanship in the industry.
Stay tuned for Part 2 – Checking the Contract…
In Part 1 of this blog, we looked at how to check the builder is right for you. In Part 2, we conclude by taking a closer look at building contracts.
PART 2 – Checking your Build Contract
Your build contract should comprise of a few documents:
- The first being your concept plan that you are intending on building
- The second should be an inclusions list or specifications list
- The third document should a residential construction building contract.
These contracts come in a HIA or Master Builders format. It is important to ensure you build contract is one that is recognised by these associations. And as with any contract, ensure you understand all your contractual obligations as specified in the build contract.
Has your builder offered a fixed-price contract with accurate costings?
All blocks of land are unique – they have varying levels of slope, dimensions, overlays and soil types. The builder needs to know about any issues on the block that can potentially blow out your budget costs before you sign the contract. Often builders get away with having a lower initial contract price by changing costings to allowances. This means they can allow a certain amount for site works in the initial contract and are at liberty to increase this amount once you are locked in. You should always request a fixed-price contract with all items fully costed.
Am I getting what the salesperson told me?
All too often we hear stories of customers being told pre-contract that they are getting ‘X’ by the sales consultants hungry for a signature, but then their contract reflects something completely different. A common tactic used by sales staff is to make allowances based on their understanding, not from an estimators costings. These allowances can and most probably will change after a client has signed a contract, at which stage you have already paid a 5% deposit and have been passed onto the contracts administration. Never assume and ensure everything you have been told you are getting has been included.
Color selections and Inclusions Lists
Your inclusions list that comes with your contract should be specific and outline everything that you would like included in your home. It should mention brand names and specific details that you wish to include.
Does your contract have allowances in it?
Provisional Sum is used when a builder does not give an exact price for proposed work. This could mean you they could come back to you if there is a cost overrun. Where possible ask the builder to explain how he has allowed for this figure, or ask him to fix the price for the works.
Demolition and site clearing
Ensure that your builder knows about the condition of your block. To avoid any potential extra cost or surprises it is important to disclose the exact condition of the block to the builder, including soil tests, contour plans and site photos. Ensure that you build price includes site clearing.
At Built Easy, we offer a full turnkey, fixed price contract with no surprises. We have carefully selected our panel of builders based on proven workmanship and excellent industry reputation. Our experienced team is with you the whole way through the build process, from contract signing to hand over. Our mission is to make building easy and ensure that our clients enjoy a stress-free and rewarding building experience.