By the time a building contract is sitting in front of you, most of the hard work feels done. You’ve shortlisted builders, compared their work and probably settled on the one you trust. But the contract is where everything you’ve discussed becomes binding, and it’s the last point where questions cost you nothing to ask.
If you’re still shortlisting, our guide on how to choose the right custom home builder in Melbourne covers what to look for. This article picks up from there. It’s for homeowners who have a preferred builder and a quote or draft contract, and want to make sure nothing is left to interpretation before they sign.
Is the Price Fixed, and What Could Still Change It?
A fixed price is only as reliable as the documents behind it. Ask your builder to point out every item in the contract that isn’t locked in yet. In Victoria, these usually appear as:
- Provisional sums: allowances for work that can’t be accurately priced yet, such as rock excavation or retaining walls.
- Prime cost items: allowances for fixtures and fittings that haven’t been selected yet, such as tapware, appliances or tiles.
Neither is a problem on its own. What matters is how many there are, how realistic the allowances are and what they add up to. A quote with a low headline price and thin allowances can end up costing more than a higher quote with fewer unknowns.
Questions to ask:
- What is the total value of provisional sums and prime cost items in this contract?
- How were the allowances worked out, and do they match the finishes we’ve discussed?
- Which site costs are included, and what is still excluded?
Is Everything Documented, or Are Some Things Assumed?
Ask what the price has been prepared from. A contract based on full working drawings, a written specification, engineering, a soil report and a site survey leaves far less room for surprises than one priced from concept plans.
Then check that the things you’ve agreed in meetings, such as ceiling heights, window specifications, joinery and external works, are written into the specification. If it isn’t in writing, it isn’t in the contract.
How Will Variations Be Handled?
Changes happen on most custom builds. Sometimes you change your mind, and sometimes something is found on site. The question isn’t whether variations will happen, it’s how they’re managed.
- Will every variation be priced and agreed in writing before the work goes ahead?
- Who can approve a variation on our side, and on yours?
- Is a margin or administration fee added to variations, and how much is it?
What Does the Payment Schedule Look Like?
Progress payments should line up with completed stages of work, not run ahead of it. In Victoria, the deposit on a major domestic building contract is capped at 5% where the contract price is $20,000 or more, and progress payments are linked to defined stages of the build, such as base, frame, lock-up and fixing.
Ask your builder to walk you through the schedule so you know roughly when each payment falls and how it fits with your finance. If you’re using a construction loan, your lender will want to see it early.
Are You Registered and Insured for This Job?
Check that the builder is registered in the right category with the Building and Plumbing Commission, Victoria’s building regulator. The register is public and can be searched online. For domestic building work over $16,000, the builder must also hold domestic building insurance for your project and give you the certificate.
For reference, Brownhill Homes is a Registered Building Practitioner, Domestic Builder (Unlimited), registration CDB-U 53096.
What’s the Realistic Timeline, and What Can Extend It?
Ask for a realistic program for your build, not a best-case one. Then ask what the contract allows to extend it. Wet weather, council and authority delays, variations and late selections are common reasons, and most contracts allow for them. Knowing this upfront makes it easier to plan around rent, the sale of your current home or school terms.
Who Will Actually Run My Build?
The person you meet during sales isn’t always the person who runs your job. Ask who your main contact will be from contract to handover, and how often you’ll hear from them. We cover this in more detail in what to expect from your builder’s communication.
What Happens at Handover and After?
Ask how handover works, whether there’s a final walk-through with you, and how defects are reported and fixed once you’ve moved in. Ask how long the defects period runs and who you contact. Statutory warranties apply to domestic building work in Victoria, but a builder who can explain their own process clearly is usually one who follows it.
Know Your Rights Before You Sign
Before you sign a major domestic building contract, your builder must give you a copy of the Domestic Building Consumer Guide from Consumer Affairs Victoria. In most cases, you also have a five business day cooling-off period after signing.
For a contract of this size, it’s worth having it reviewed by a building lawyer before you sign. A builder who is confident in their contract will be comfortable with that.
A Quick Checklist Before You Sign
- Provisional sums and prime cost items listed, with realistic allowances
- Full drawings, specification and engineering attached to the contract
- Variation process agreed in writing
- Payment schedule matched to build stages and your finance
- Registration and domestic building insurance checked
- Realistic program, with extension of time terms understood
- One named contact from contract to handover
- Handover and defects process explained
How We Approach the Contract Stage at Brownhill
Our design and construct process means we’re involved from early design, so your price is built from detailed documentation rather than early assumptions. Once the design and scope are finalised, the price is fixed. Before you sign, we walk you through the contract, the allowances and the payment schedule, line by line if you’d like, so nothing comes as a surprise later.
It’s the same approach we take on every custom home and knockdown rebuild project.
Getting close to signing and want to be sure you’re asking the right questions? Book a complimentary consultation with the Brownhill Homes team. Bring your plans, your questions and anything you’re unsure about.
