A Guide To Domestic Building Contracts

September 5, 2023    propertylawyersperthwide
A Guide To Domestic Building Contracts

A domestic building contract must be in place between you and your building practitioner if you are hiring a contractor to complete domestic building work that will cost more than $10,000 (including labour and materials) and will entail more than one type of work (e.g., more than just roofing or tiling).


The building contract lawyers Perth your builder hires must adhere to the Domestic Building Contracts Act of 1995’s criteria. Such a contract is an excellent approach for any construction project in Australia, no matter the cost. Having the idea and knowledge of your building contract eliminates the chances of builders taking advantage of you.


However, it’s always best to hire the best property contract lawyer in Perth to check if the contract meets all the Domestic Building Contract Act requirements. In this article, you’ll learn everything about the domestic building contract to be knowledgeable enough not to get tricked by any builder.

Key Notes To Remember Before We Start

Take note of the following modifications made to the Domestic Building Contract Act on August 1, 2017:

  • From over $5,000 to over $10,000, a large residential building contract now requires a minimum sum.
  • Cost-plus contracts can now be awarded over $1 million, up from $500,000 or more. The cap remains $500,000 or more for cost-plus contracts signed before August 1, 2017.


Also, before you sign a significant domestic building contract, your builder’s lawyer for property must give you a duplicate version of the Domestic Building Consumer Guide.

Overview of The Domestic Building Contracts Act 1995

The Domestic Building Contracts Act of 1995 (Act) governs domestic construction projects. The Act covers the following works:

  • Building a house or any component of a house, including but not limited to any related work like landscaping, fencing, driveways, carports, pools, etc.
  • Any house improvement, including modifications and remodelling.
  • Removal or demolition of a house or any individual component of a house.
  • Creating a home’s plans or specifications.


If you hire a builder to accomplish these tasks, the construction project’s total cost must exceed $10,000. You and the builder must enter into a significant domestic construction contract since the job requires more than one particular type of work (e.g., not only painting).


Consult one of the top property lawyers in Perth to check and see if all the contract’s clauses fit your needs and demands. A Major Domestic Building Contract may only be entered into by a registered builder.

Things To Check Before Signing a Domestic Building Contract

Check the following things before you sign a Domestic Building Contract:

  • Your builder is included on the Australian Building Authority’s register of builders.
  • Your builder has given you a copy of the Domestic Building Consumer Guide.
  • Ensure that the contract price includes all construction, relocation, inspection, and government levies.
  • Be mindful of the expenses not covered by the agreed-upon price, which must be noted as such in the contract.
  • Your builder has given you a copy of their most recent domestic building insurance certificate (for work exceeding $16,000) and the project’s address. This safeguards you if the builder perishes, goes bankrupt, or vanishes.
  • The task must be done fully and precisely described in the building contract agreement.
  • The contract contains no unjust terms, and any unique requirements have been thoroughly studied and understood.
  • Prime expense items and preliminary sums should be avoided because they can raise the contract price.

Liquidated Damages From Building Contracts

This building contract law entitles you to add a liquidated damage clause. This clause estimates the damages you may experience if your contractor doesn’t adhere to the agreement terms.


Rent, travel, and other out-of-pocket costs can be included in the liquidated damages clause’s aggregate. It must be a conservative prediction of your anticipated loss that is neither extravagant nor out of scale.


Even if your contract doesn’t specify liquidated damages or the sum is left blank, you can still claim damages. To do so, consult one of the best property lawyers in Perth.

Domestic Building Contract: Implied Warranties

Every home building contract must include implicit warranties in accordance with the Act. Construction company guarantees:

  • The work will be completed per the plans and requirements outlined in the contract and will be done professionally and professionally.
  • The builder will only employ properly suited materials.
  • The law will be followed in carrying out any work.
  • With reasonable care and expertise, the work will be completed.
  • The project will be finished by the date noted in the contract.
  • The work and materials employed by the builder are suitable for the purpose specified in the contract if one is specified.


You should address the problem with your builder and allow them to fix it if you think they have not followed the guidelines above.


Before taking any further action, you must try to remedy the problem. You can take your builder’s refusal to comply with your request or lack of response to the Domestic Building Dispute Resolution. Under the Act, you cannot agree to waive your right to use a warranty.

Progress & Deposit Payments

The law also specifies maximum deposit amounts and uniform payment percentages at each stage of your finished build. The progress payments outlined in your contract shouldn’t be front-loaded or paid in huge chunks throughout the first few phases, as this would greatly favour the builder.


If you do this, you risk the builder stealing the cash and not completing the work. Also, domestic building insurance could exclude advance payments.

Final Notes

So, if you’re buying or remodelling your home and need a contractor, never forget to sign their Domestic Building Contract. Hiring one of the best property lawyers in WA, is the best decision to ensure the Australian builder doesn’t commit fraud or scam.


You can find such experienced domestic property lawyers at Property Lawyers Perth WA. Their property lawyers are skilled at providing legal counsel and assistance with building contract concerns. So, never hesitate to contact us if you need reliable assistance with building contract-related issues.

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