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Office of Fair Trading Home Building Contract: A Quick Guide

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The Office of Fair Trading in NSW issues standard form residential building contracts, such as the Home Building Contract for Work Over $20,000. This article shows you which clauses to pay special attention to, as they significantly affect essential risks associated with construction.

Table of Contents

Office of Fair Trading Contracts

NSW Fair Trading Home Building Contract for Work Over $20,000 is issued by the NSW government. As such, you can be sure it is more objective and fair to both yourself and your builder, as opposed to other standard form contracts like those issued by the Master Builders Association NSW or the Housing Industry Association, which are generally skewed more towards the builder’s favor.

Nevertheless, it would still be prudent to go over your contract and be mindful of important clauses, to make sure your home building project proceeds smoothly, and that you have a recourse should you hit a bump in the road at any point during the build.

OFT Home building contract for work over $20,000
For illustration purposes only.

Important Clauses You Need to Watch Out For

Here are the top clauses you need to look into, as they affect essential risks relating to time, cost, and quality.

 

Clause 5 Commencement of work

What it is:

Sets out the date when works are to be begun

Purpose:

Determines the project’s timeline

Risk minimised:

For illustration purposes only.
Clause 6 Time for completion

What it is:

Sets out the deadline for the building project

Purpose:

Determines when works must be completed

Risk minimised:

OFT Time for completion clause
For illustration purposes only.
Clause 7 Extension of time

What it is:

Sets out the instances when delay may be allowed

Purpose:

This affects other matters such as completion and payment

Risk minimised:

Clause of time home building contract
For illustration purposes only.

Clause 8 Completion of work

What it is:

Sets out the instance when the work is to be deemed completed

Purpose:

To set the obligations of the parties as well as their rights in relation to project completion

Risk minimised:

For illustration purposes only.

Clause 12 Progress payments

What it is:

Sets out the instance when the work is to be deemed completed

Purpose:

To set the obligations of the parties as well as their rights in relation to project completion

Risk minimised:

home building contract progress payment
For illustration purposes only.

Clause 13 Variations

What it is:

Sets out when changes are allowed to be made by the parties

Purpose:

To determine whether a variation is allowable, and to determine when penalties may be imposed, if not

Risk minimised:

For illustration purposes only.

Clause 14 Time for payments

What it is:

Sets out the schedule for payments after progress payment claims are made

Purpose:

To determine the parties’ rights and liabilities in terms of being paid and receiving payment

Risk minimised:

time for payments home building contract
For illustration purposes only.

Clause 15 Final payment

What it is:

Sets out when payment must finally be made

Purpose:

To make sure that the builder does not make undue demands for payment

Risk minimised:

Final payment clause on home building contract
For illustration purposes only.

Clause 23 Defects rectification

What it is:

Sets out the procedure for rectifying defects

Purpose:

To establish owner’s right to be compensated for damage caused by the owner

Risk minimised:

home building defects rectification clause
For illustration purposes only.

Clause 24 Suspension of work by contractor

What it is:

Sets out the instances when the builder or contractor may suspend the works

Purpose:

To lay out builder’s right to suspend, and home owner’s obligation

Risk minimised:

suspension of work by contractor clause
For illustration purposes only.

Clause 25 Termination of contract by owner

What it is:

Sets out the owner’s right to terminate

Purpose:

So the owner will know the proper way of terminating the contract

Risk minimised:

home building termination of contract by owner clause
For illustration purposes only.

Clause 26 Termination of contract by contractor

What it is

Sets out the builder or contractor’s right to terminate the contract

Purpose:

So builder can terminate the contract for cause, without the risk of being in breach

Risk minimised:

For illustration purposes only.

Clause 27 Disputes

What it is:

Sets out the procedure that parties need to undergo in case there is dispute

Purpose:

To save parties’ time, energy, and financial resources

Risk minimised:

OFT home building contract disputes clause
For illustration purposes only.

How We Can Help

Of course, these are only some of the important clauses in the 2018 Office of Fair Trading Home Building Contract for Work Over $20,000. You would benefit greatly if you subject your contract to a more thorough Contract Review by a specialist construction lawyer, who will go through each clause one by one, and show you how you can negotiate the contract further, to make sure you don’t run into snags later on.

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Office of Fair Trading Home Building Contract: A Quick Guide
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