Owner Builders need to be aware of their requirements and obligations when it comes to contracts.
Domestic building contracts are governed by the relevant state legislation and they do vary from jurisdiction to jurisdiction.
Our advice to our owner builder students is to always establish a contract for any works over a value of $1000.00. In some states, this is mandatory.
A contract does not need to be complex or wordy, but it must clearly detail the works to be carried out, the value of the contracted works and the terms of payment.
For minor works a hand written simple contract is enough to satisfy the requirements, but it must accurately represent the expectations of the client and the obligations of the provider.
Larger contracts may best be handled by using a readily available standard form such as those produced and offered by the Housing Industry of Australia (HIA) or similar industry groups.
Owner Builders will benefit from having a standard layout for all their contracted works which provide the opportunity to specify scope of works, deposits, progress claims, final payments and any retentions or warranties that apply.
Contracts may be developed from and reference the working drawings (approved plans), the specifications and any other associated tender documents.
Remember to be a valid contract that suits a typical owner builder project, there are certain elements that must be included. They must be signed by both parties (owner builder and the contractor) provide license and insurance details of the contractor and reference any certifications or inspections that apply to the works in respect to compliance. (eg waterproofing, electrical, plumbing etc)
We cover these elements in the owner builder course and the Abacus Owner Builder Study Guides.
Remember, we are here to assist and we have a range of resources available and accessible to all our owner builder students.
Rick Heaton is a Building and Construction Industry professional with formal tertiary qualifications in management and training.