Did You Know There's a New Contract for Building a Home in Qld?

On July 15 2015, a new Residential Building Contract will come into effect in Queensland. According to the QBCC and Master Builders Queensland, it will incorporate a number of changes:

For work priced at more than $3,300 there will now be 2 levels of contract:

  • Level 1 where the contract price is less than $20,000
  • Level 2 where the contract is priced at $20,000 plus with more onerous conditions, namely details of price, it's method of calculation and warnings regarding price change, as well as documents which must be given to you as the new home owner.

Warranties will continue to apply but:

  • 6 years (not 6 years 6 months) from date of completion for structural defects (previously Cat. 1) e.g. leaking roof and leaking shower etc.
  • 12 months from date of completion for non-structural defects (previously Cat. 2) e.g. sticking doors or windows and minor plasterboard cracking etc. 

For both structural and non-structural defects, you will have an additional 6 months to lodge a notice of defect with the QBCC as long as you have advised your builder in writing.

You may withdraw from your building contract if you're not given a copy of the signed contract within the cooling off period of 5 business days of signing your contract and in the case of Level 2, a copy of a Consumer Building Guide even after the cooling off period. 

You will be required to pay a maximum deposit of:

  • 10% for a Level 1 project
  • 5% for a Level 2 project
  • 20% if more than 50% of the work entails off-site work e.g. in  the case of prefabricated homes or kitchens whether Level 1 or Level 2

Now there are no prescribed payment stages. All the Act requires is that claims be proportionate to the value of the work completed. Regardless, independent Stage Inspections by professional building inspectors continue to be invaluable in making sure that you're happy that all the work has been conducted to a satisfactory tradesmanlike standard with appropriate materials and without defects or omissions so you can make your payments with confidence.

Where variations are proposed, these should not be commenced until you have agreed to them in writing e.g. via email. And your building contractor must give you a copy of variation in accordance with QBCC formal requirements, at least 5 business days from the time that you and he agree to it before any work starts. If the value of any single variation or the sum of several variations increase your contract price by more than $5,000, an additional insurance premium must be paid to the QBCC before the work on the variation starts.

For any extensions of time, your building contractor must get your approval in writing e.g. via email and you must be given a signed copy of the claim within 5 business days of approving or at the very least within 10 business days of your building contractor becoming aware of a cause for delay. If you don't approve the claim, the QBCC deem the extension of time to be disputed. 

There is no requirement for you to be provided with foundation data prior to entering your contract if your building contractor can't lawfully access the site. But your contract must include a guarantee not to increase the contract price if the foundation data upon which the contract price was determined is found to differ and therefore, increase the build price. In this case, your building contractor should be responsible for the increased cost of foundation works.

For Level 1 projects, your building contractor must give you a commencement notice within 10 business days of starting work on the site. However, for Level 2 projects, the contract itself must state the date upon which work is to commence on site and the date for practical completion.

Upon practical completion, you are not required to make your final payment until all the contracted work has been completed in accordance with all the contracted legal requirements and either without any defects or omissions or with only minor ones that will not unreasonably affect your occupying your new home. Where there are significant defects or omissions, your building contractor must give you a defects document listing all the agreed and non-agreed matters compiled by both you and your building contractor during a handover inspection. And that's where an independent expert opinion becomes essential in providing a detailed report itemising all defects and omissions with supporting photographs.

Because we are not solicitors and this is for your general information only, before you sign anything you should always seek professional legal advice to fully understand the terms and conditions of your contract. For more information check out the QBCC Consumer Building Guide at www.qbcc.qld.gov.au.