When you engage a home builder, you want contracts to be airtight. Every aspect of the construction needs to be covered, so you have a realistic depiction of how the process will unfold. When you engage a home builder, you want contracts to be airtight. Every aspect of the construction needs to be covered, so you have a realistic depiction of how the process will unfold. But with such a detailed document, you need to make sure everything has been accounted for.
With this in mind, here are three important points that every building contract should clarify:
1) The company’s name on the license
It must be the company or partnership name that is licensed.
If you are working with a home building company rather than an individual, then it must be the company or partnership name that is licensed. An individual that legally represents the home builder might be licensed themselves, without the company doing the work actually being licensed in their own name.
Every state and territory should hold a register of licensed builders and traders (for example – Services NSW), which you can use to search for the appropriate name. If an unlicensed company conducts the contracted work, you may not be adequately protected against any dodgy construction.
2) A clause for changes
Whether because of financial blowout, changes to the home builder’s setup or even wider economic factors, plans for a construction can change partway through the process. When this is the case, you can come to an agreement with the company in writing.
However, there should be a clause in your building contract that allows this. It is important to check that it is clearly worded, and stipulates that you must both agree to any changes in writing before they can occur. This way, you have greater control over the building process.
3) Payment for work, not hours
In some cases, there may be a clause in your building contract which states you will pay for hours spent on the job, rather than the work done. These progress payments should be made as the building is completed, rather than being fixed to the passage of time. Otherwise, you may be paying a builder for little to no work at all.
There are many ways you can get the unfair end of a deal when signing a building contract. License checks and close reading of the fine print can prevent you from paying for lazy builders, having your dream home changed unwittingly or working with an unlicensed business.
Another way to get more information ahead of time is to use Unlock Property’s customer reviews. They cover a wide range of home builders, giving independent information on how companies operate and if they follow due process.
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