Who do I need to review my building contract in Victoria?
Having your building contract independently reviewed to identify and minimise risks, highlight discrepancies and ensure that you understand what you are committing to is setting you up for the best possible build experience. It can also save you time and money and a lot of stress.
Everyone has different reasons for getting their contract reviewed. Just because you’ve built once before doesn’t mean it’s not worthwhile as every contract and situation is unique. While written in plain English, building contracts could be 100-200+ pages long, there may be terms that many may be unfamiliar with, unless having experience in the construction industry. There is a lot of important information to read and understand and we appreciate that it may be daunting. Being educated on the important clauses enables you to make your own judgement to determine if you are willing to accept them or need further clarifications to feel comfortable.
We’ve all been there, signing up for a $60 gym membership or a new mobile phone plan without reading through the long list of T&C’s but why would you do this with a $300,000 to $2m investment?
Not all building contracts are created evenly, from our experience, some builders definitely have better contracts, clearer documentation, and are more organised than others. It is hard to believe, but true that some builders do not supply the homeowner with all of the relevant documentation that is actually listed in the contract as forming a part of the contract.
As there is an array of documents that form a part of the building contract including tender/specifications, Architectural and Engineering drawings and soil report, it’s a very good idea to have all of the relevant documentation reviewed holistically. A good solicitor or conveyancer will have extensive legal knowledge and perhaps good building knowledge but not to the depth and extent of a Building Consultant. They will usually review and provide advice on the contract only; lawyers don’t usually review the plans.
Once the contract is signed, any changes that you make can incur expensive variation charges, so it is important you are content with what you’re agreeing to.
Homeowners and builders often enter disputes regarding variations, delays, defective or incomplete building work, liquidated damages, and disagreements regarding payments. All of these things are in the contract and when the contract is followed, these disputes can be easily avoided. These days volume builders typically have Building Supervisors scheduling the projects, these Supervisors may not understand the contract themselves and may deviate from the processes outlined in the contract which can cause significant issues. We find similarities with smaller, custom builders and those who are just starting out.
If building contracts were completed by builders correctly, if the clauses were followed and homeowners understood the contract, the majority of disputes would be resolved saving a lot of heartache for all.
The building dispute resolution process is a lengthy, stressful, costly and all-consuming process.
It all comes back to the contract, so the tighter the contract and the more it is understood, the less chance of a dispute arising.
Building Contract Reviews by Manse Group
Our building contract reviews are unique in that they look at the build from a builder’s perspective. We take an educative approach, ensuring the homeowner understands the information in their contract so they can ask questions, seek clarification and ultimately feel comfortable with what they are committing to before they sign the contract.
Our knowledge and experience from having completing thousands of inspections across all stages of a build and understanding how buildings age, where issues arise and where potential problems with your home can be avoided.
We cross-reference contractual documentation that has (or has not) been provided to ensure a holistic due diligence approach. In instances where the land has not titled, there is an additional layer of risk as a soil test has usually not been completed therefore, we can utilise other documents to ascertain if allowances and wording gives a homeowner adequate protection.
Domestic Building Insurance (DBI) is a prime example of an extremely important clause in the contract that we have been discussing with our clients for many years. In years gone by, it has been very common for builders to not secure the required DBI before taking the homeowner’s deposit, putting tens of thousands of dollars at risk. If the Builder was to go insolvent before construction reaches completion of the base stage, homeowners will lose their hard-earned deposit with absolutely nothing they can do about it. It was very unfortunate to see this happen with a large volume builder in 2023, however it is written in the building contract very clearly, that the builder must not request a deposit, until presenting a DBI certificate. If homeowners better understood what this clause meant and the ramifications if the worst was to happen, we are sure they would push back on paying the deposit up front. See our post here for more info on Domestic Building Insurance.
Our thorough reviews are completed by a Registered Building Practitioner, not a legal professional. As our reviews are desktop-based, we can review building contracts for clients Victoria-wide. We highlight items that are not typical, risky or unclear, so they go into the agreement with confidence and an understanding of what is being agreed to. Homeowners can risk-rate the likelihood and/or consequence if certain clauses were to be utilised.
Once we send our feedback on the contract, our clients have the opportunity to arrange an in-depth discussion with the Building Consultant to ask clarifications, ensure they understand the feedback and get advice on how best to approach the suggestions with their builder.
We are very proud to educate homeowners on their building contracts, while it can be daunting, they come out feel empowered. For new home builds in our core service area, we are usually engaged to continue supporting the homeowner with independent stage inspections throughout the build.
Not all contracts are created equally
Many believe the physical foundations are the most important part of building a home, we believe the contract documents are initially the most important foundation and are crucial to kick-starting the best possible new home building journey.
Homeowners should never feel pressured to sign a contract and they should have a clear understanding of all the risks before committing.
It takes time, but crossing your t’s and dotting your i’s from the very beginning is critical to avoid disappointment, stress and suffering.
Contact our friendly team about your build, our experienced team of building contract specialists can review your building contract in Geelong.
