Custom Build Homes: Navigating the Home Construction Contract
It can feel like trying to read a foreign language if you’ve never dealt with a building contract before. And trust us, you don’t want to just skim through and hope for the best. Overlooking the fine print or not fully understanding what you’re signing could lead to headaches down the road, and no one wants that when they’re already knee-deep in decisions about fixtures, fittings, and finishes.
Before you grab that pen and start signing on the dotted line, it’s crucial to make sure you know what to look out for. Every aspect matters, from the big-ticket items like costs and timelines to the smaller details like who’s responsible for supplying the tiles and tapware. A well-drafted contract is your safety net, ensuring everyone’s on the same page and that no nasty surprises are waiting to trip you up later.
The high stakes of signing a domestic building contract as a homeowner
A well-crafted contract is your shield against unforeseen costs, delays, and disputes. Here’s a detailed breakdown of the key things you need to watch out for to ensure your project runs smoothly and ends on a high note.
Inclusions and fittings
Make sure that every inclusion, choice, and fitting you’ve agreed on with your builder is clearly documented in the contract. It might seem obvious, but you’d be surprised how many homeowners assume these details will be sorted out later, only to find themselves stuck in arguments over who is responsible for what.
If you’ve picked out a specific oven, tapware, or tile, it needs to be listed in the contract with as much detail as possible—brand, model, finish, and so on. This ensures there’s no confusion or substitution down the track. Also, clarify who’s responsible for supplying these items. Some builders will include them in their costs, while others might expect you to purchase them separately.
Legislation requirements
Your building contract must meet the relevant legislation requirements for your location. In Victoria, contracts over $5,000 are subject to specific regulations. It’s crucial to familiarise yourself with your state’s building laws to ensure your contract complies with these rules. While your builder should be aware of these requirements, it’s still worth double-checking. After all, it’s your home on the line.
Commencement and completion dates
Delays in construction are almost inevitable, but that doesn’t mean you should accept open-ended timelines. Your contract should clearly state the commencement and completion dates, including how the commencement date is calculated.
Additionally, ensure a reasonable allowance for delays, including weather conditions, supply chain issues, or other unforeseen events. The key is to strike a balance; the builder needs some flexibility, but you also need assurance that your project won’t drag on indefinitely.
Builder’s registration and licensing
Before you sign anything, check that your builder’s registration details or license are up-to-date. This ensures they’re legally allowed to build and qualified to handle your specific project. For instance, some builders may have restrictions on their licenses that limit them to constructing single-story buildings. Hiring a builder with such a limitation for a multi-story project is a recipe for disaster. Do your due diligence and ensure your builder is the right fit for your needs.
Planning and building permits
Your contract should clearly state who is responsible for obtaining and paying for the necessary planning and building permits. This might seem like a minor detail, but it’s one of those things that can cause major headaches if overlooked.
Typically, the home builder takes care of this, but don’t just assume that’s the case. If the responsibility falls on you, ensure you know all the required permits and associated costs.
Special conditions
Special conditions in a contract can override general conditions, so reading them carefully is vital. These are often where the devil is in the details—small clauses that can have big implications later on. Special conditions can significantly impact your project, whether it’s something like a change to payment terms or a specific provision for dealing with delays. Make sure you fully understand each one before signing.
Domestic building warranty insurance
Accidents and issues can happen no matter how confident you are in your builder. That’s why ensuring that domestic building warranty insurance is in place and accurately referred to in the contract is essential. This insurance protects you if the builder cannot complete the project due to insolvency, death, or disappearance. It also covers defects that may arise after the construction is complete. Without it, you could be left in a tough spot if things go wrong.
Progress payments
Progress payments are another crucial aspect to get right. Your contract should outline how, when, and how much can be claimed at each build stage. This ensures you’re not paying too much upfront or getting stung with a hefty bill before the work is done. Each payment should correspond to a specific milestone, like the completion of the foundation or framing. Ensure these milestones are clearly defined and that you’re comfortable with the payment schedule before agreeing.
Defects liability period
The defects liability period, or maintenance period, is the time frame in which the builder is responsible for fixing issues that arise after the project is complete. Typically, this period lasts three to six months, but it can vary. Ensure this is clearly outlined in your contract so you know how long you’re covered if something goes wrong after you move in.
Variations
During any construction project, changes are almost inevitable. Whether adding an extra feature or switching materials, these variations must be handled correctly. The ideal process involves:
- Discussing the change
- Getting a quotation
- Agreeing on the price
- Documenting it before the work begins
This way, everyone is on the same page, and there’s no room for disputes over who agreed to what.
Prime cost and provisional sum items
Prime cost items are fixtures and fittings listed in the contract but haven’t been specifically chosen or priced at the time of signing. Provisional sum items, like excavation, are allowances for work that can’t be precisely costed until later. Both can lead to cost blowouts if not managed carefully. Avoid these items by making final decisions before signing the contract. If you must include them, make sure you understand how they’re estimated and what the potential costs could be.
Home builders in South East Melbourne you can trust
Eltcon is the homebuilder of choice in South East Melbourne, thanks to its unique blend of expertise, innovation, and commitment to client satisfaction. Our dedication to delivering homes on time and within budget is supported by internal systems that manage every detail and a passion for creating homes that resonate with modern living.
As a proud member of the Australian Veteran-Owned Business Network, Eltcon is dedicated to bringing your dream home to life with true professionalism and care.
