Consumer Tips
 
Before signing a major domestic building contract

Registration and Membership


Ensure that the builder is a registered domestic building practitioner and a member of the Master Builders Association of Victoria. Telephone the Building Commission on 9285 6400 for builder registration enquiries or click here. To confirm membership of the Master Builders please call 9411 4555.

Standard Building Contract


Select, or ask the builder to select, a standard building contract. The MBAV have available the following contracts, suitable for domestic building construction:

(1) New Homes Contract (HC-6)
(2) Home Improvements Contract (HIC-5)
(3) Domestic Cost Plus Contract (CP-1)
(4) Minor Works Contract (MW-1)

These contracts have been drafted to comply with the Domestic Building Contracts Act 1995 (“the Act”), and to be fair and reasonable to both the owner and the builder. If other types of contract are to be considered, please check if they conform to the Act. You and the builder may agree to include special conditions if these are necessary in your particular case. We strongly recommend however that you do not add to, subtract from or alter any standard contract without prior legal advice.


Cooling Off Period


You have 5 business days in which you may withdraw from the contract after signing the contract and receiving a signed copy of it. The Master Builders HC-6, HIC-5, CP-1 and MW-1 contracts each contain a notice to be completed and given to the builder if you decide to withdraw from the contract under this provision. (This option does not always apply).

Deposits


The maximum deposit you may be asked to give to the builder is 5% if the contract price is $20,000 or more and 10% if the contract price is less than $20,000. 

Contract Obligations


Your primary obligation is to pay the builder promptly all moneys as and when they become due.  You must also give the builder free and uninterrupted access to the site, and supply all information and all items for which you are responsible, as and when requested by the builder and without delay. If you do not fully understand any of your contractual obligations, please ask your builder or seek independent legal advice.

Variations


Any changes you wish to make to the works should be requested in writing and any additional cost agreed in writing before the builder carries out the variation.

Payments

If payments are to be made in stages, then the builder should be paid for any  particular stage when that stage has been completed, and not before. The Master Builders contracts explain the meaning of each stage in the definitions sections.

Defects

The Act states that defective in relation to domestic building work includes:

  • a breach of any of the warranties implied by the Act (see below)
  • a failure to maintain the standard or the quality of building work specified in the contract.

If you find any item of work that falls into at least one of the above categories, the builder is required to fix it - and any damage that may have been caused by it - at no cost to you.
If you are unsure as to whether or not something is a defect  for these purposes or who is responsible for it, you should first discuss it with your builder. If you need an independent party to make a technical assessment, the Victorian Building Authority (VBA), Building Advice Conciliation or other independent experts can assist with inspection services and reports.

Quality of Building Work

Implied warranties
The law implies into every domestic building contract the following warranties:
a). The work will be carried out in a proper and workmanlike manner and in accordance with the plans and specifications set out in the contract.

b). All materials supplied by the builder will be good and suitable for the purpose for which they are used.  Those materials will also be new, except where the contract calls for other type of materials.

c). The work will be carried out in accordance, and will comply, with all laws and legal requirements.

d). The work will be carried out with reasonable care and skill and it will be completed by the date (or within the period) specified by the contract.

e). The home will be suitable for occupation at the time the work is completed, whenever the scope of the contract extends as far as occupation.

f). The work and materials used will be reasonably fit for the purpose - or will be of such a nature and quality that they might reasonably be expected to achieve the result - whenever the contract states a particular purpose for which the work is required - or the result which the building owner wishes the work to achieve. These warranties may not be excluded by the builder (or anyone else); and they “go with the land” – in other words, during the warranty period, whoever owns the land is entitled to the protection of the warranties.

Standards and Tolerances

Perfection is usually impossible to attain in the building process.  There are many reasons for this, but principally it is due to the inherent physical and chemical properties of building materials and components. It is therefore accepted that certain imperfections will not count as “defects” as long as they do not exceed the range considered reasonable in all the circumstances.  The Building Commission has published a pamphlet titled   “ Guide to Standards and Tolerances ” setting out the VBA’s views of reasonable standards and tolerances for domestic building work.  It is unrealistic and unreasonable in normal circumstances to expect – or to insist on – higher standards than these.  If you intend to build, it may be helpful to familiarise yourself with these limitations before proceeding, so that your expectations and what is likely to be achievable are reconciled from the start.  You can obtain a copy of the guide click here. If you need further clarification of any aspects of the building process before you embark on it, you may consider seeking advice from your prospective builder, if you have one.   If, for whatever reason, this is inappropriate or unsatisfactory, you should seek advice from independent sources.

Such sources may include:

 
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Master Builders Association of Victoria
332 Albert Street, East Melbourne VIC Australia 3002
GPO Box 544, Melbourne VIC Australia 3001
Phone: (03) 9411 4555 | Fax: (03) 9411 4591