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.
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:
- Time
- Cost
What it is:
Sets out the deadline for the building project
Purpose:
Determines when works must be completed
Risk minimised:
- Time
- Cost
What it is:
Sets out the instances when delay may be allowed
Purpose:
This affects other matters such as completion and payment
Risk minimised:
- Time
- Cost
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:
- Time
- Cost
- Quality
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:
- Time
- Cost
- Quality
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:
- Time
- Cost
- Quality
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
- Cost
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:
- Time
- Cost
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:
- Time
- Cost
- Quality
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:
- Time
- Cost
- Quality
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:
- Time
- Cost
- Quality
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:
- Time
- Cost
- Quality
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:
- Time
- Cost
- Quality
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.
