Essential Risks

For most Home Owners, the most important things are Cost, Time, and Quality

These are known as the “Essential Risks” to every building contract. It’s important to know how to minimise these risks before the start of your project, and you can do this by looking at the terms of the contract that affect cost, time, and quality.

What is a Master Builders NSW BC4 Contract?

Master Builder BH4 contract NSW
The above image is for illustration purposes only and is sourced from the MBA website.

A Master Builders BC4 contract is a residential building contract prepared and issued by the Master Builders Association in NSW. As such, they’re generally written to favour the Builder more than the Home Owner, hence, you should take that extra step of going through the contract’s terms thoroughly, and propose amendments as necessary.

But first: Contractor Licence

Before going through the contract’s terms, double check to make sure that your Builder or Contractor is licenced. You can verify the contractor’s licence through the NSW government’s service website.

nsw contractor licence check

And now, the 10 contract terms you need to know:

1) Commencement of Work

  • What it does: Sets out the commencement date of the building works
  • Why it’s important: This affects other matters like payment and completion
  • Essential risks minimised:
contract terms commencement of work
The above image is for illustration purposes only and is sourced from the MBA website.

2) Time for Completion

  • What it does: Sets out the building period
  • Why it’s important: This affects the parties’ other contractual rights & liabilities relating to extension of time, liquidated damages, etc.
  • Essential risks minimised:
time for construction completion NSW
The above image is for illustration purposes only and is sourced from the MBA website.

3) Extension of Time

  • What it does: Lays out the procedure for Builder/tradesperson to claim extension of time
  • Why it’s important: To safeguard against invalid claims for extension of time
  • Essential risks minimised:
extension of time building contract NSW
The above image is for illustration purposes only and is sourced from the MBA website.

4) Practical Completion

  • What it does: Lays out when, how, and in what instances the Builder/Contractor can claim that the works have reached practical completion
  • Why it’s important: It allows you to claim incomplete works/defects, on the other hand
  • Essential risks minimised:
payment on practical completion NSW
The above image is for illustration purposes only and is sourced from the MBA website.

5) Progress Payments

  • What it does: Lays out the procedure for Builder to claim payment from you, based on the stages of work and the payment terms
  • Why it’s important: Allows you to dispute the value and quality of work
  • Essential risks minimised:
progress payment NSW
The above image is for illustration purposes only and is sourced from the MBA website.
progress payment schedule template NSW
The above image is for illustration purposes only and is sourced from the MBA website.

6) Variations

  • What it does: Lays out the procedure for Builder to claim payment from you, based on the stages of work and the payment terms
  • Why it’s important: Allows you to dispute the value and quality of work
  • Essential risks minimised:
variation claims NSW
The above image is for illustration purposes only and is sourced from the MBA website.

7) Defects Rectification

  • What it does: Lays out the procedure for rectification of defects
  • Why it’s important: It sets out your right to demand rectification in case of defects
  • Essential risks minimised:
defects liability period NSW
The above image is for illustration purposes only and is sourced from the MBA website.

8) Suspension of the Works

  • What it does: Lays out the instances when the works may be suspended, and the procedure to be employed in case suspension is warranted
  • Why it’s important: So you’ll know whether or not a suspension of works is justified or properly imposed
  • Essential risks minimised:
suspension of work clauses nsw
The above image is for illustration purposes only and is sourced from the MBA website.

9) Termination of the Contract

  • What it does: Lays out the grounds and procedure for each party to terminate the contract
  • Why it’s important: So you know when and how to terminate the contract in case of breach, or other allowable causes
  • Essential risks minimised:
building contract termination nsw
The above image is for illustration purposes only and is sourced from the MBA website.

10) Dispute Resolution Procedure

  • What it does: Lays out the procedure for settling building disputes
  • Why it’s important: This is an easier, quicker, and cheaper remedy than filing a case in court
  • Essential risks minimised:
construction dispute resolution procedure NSW
The above image is for illustration purposes only and is sourced from the MBA website.
MBA BC4 Contract Review and Advice NSW

How We Can Help You

Understanding construction contracts, especially the intricate details of the MBA BC4 Contract, can be daunting. As a solicitor and construction lawyer with over a decade of specialisation in construction law, I’ve consistently advised homeowners on their contractual and legal rights. I’ve represented homeowners in NSW, Australia, across all courts of competent jurisdiction, ensuring their intentions are accurately reflected in contracts. Whether it’s about understanding your rights, risks, or obligations, or needing amendments to your contract, I’ve been there to guide homeowners like you.

MBA BC4 Contract Review Lawyer - John Dela Cruz

If you’re seeking tailored advice or wish to discuss any concerns, don’t hesitate to email me directly. Alternatively, you can organise a call with me, your dedicated construction lawyer, to delve deeper into your specific needs. Take the next step in safeguarding your interests; reach out today.