Sydney Builder Contracts – What Does NSW Fair Trading Say?

Don’t get caught out with a Sydney builder!  

Picking the right Sydney builder for your home or renovation is perhaps one of the most important decisions you need to make.

Getting it wrong can be costly and extremely heart breaking.

One of the best ways to protect yourself with a builder is to ensure you have a solid contract in place.

Here’s what NSW Fair Trading has to say about builder contracts.

1. Important builder contract considerations

  • A contract must be in writing

In NSW, builders should provide a written contract for residential building works under the following circumstances:

  • If the price of the contract is more than $5,000; and
  • If the price of the contract is unknown but the materials and labour are expected to cost more than $5,000

Make sure your builder provides you with the right contract. Don’t proceed with anything unless you have everything written down.

2. Small jobs also need a contract

However, small jobs are also not excluded from contracts. Work that covers residential buildings from $5,000 to $20,000 requires written agreements as well.

Both parties (the builder and you) should sign the written contract with the following content:

  • Names of the parties including the person who holds the contractor licence as seen on the licence
  • Contractor licence number
  • Work description
  • Any work specifications or plans
  • Contract price, if known
  • Clause about the quality of construction, stating that it will comply with:

i) the Building Code of Australia, to the extent required under the Environmental Planning and Assessment Act 1979

ii) other related codes, specifications, standards that the work should comply with as stated by the law

  • clause about the contractor’s limit of the liability for failure to comply with the above work compliance clause if the failure relates solely to:

i) specification or design on behalf of the owner of the home (not the builder)

ii) specification or design by the owner of the home should the contract gave advice in writing that they do not agree with the “work compliance clause”

3. Larger jobs need a more detailed contract

NSW Fair Trading also emphasises that larger jobs will need a more detailed home building contract. This applies for residential building works exceeding $20,000.

The contract should contain the following:

  • Date and signature of both parties
  • Name of the homeowner and the contractor as seen on the licence
  • A sufficient work description
  • The price of contract, if known which should be displayed visibly on the first page with explanation should the contract price be unknown
  • Clauses explaining changes to the plans and contract including progress, payment schedule, fixed payments and work scope are to be dealt with.

For more information about Sydney builder contracts, check out NSW Fair Trading

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