Practice · 14
Building and construction contracts
A building contract decides who pays when a job goes wrong. Read it before you sign, and use it properly once the work starts.
The practice prepares, reviews and negotiates building contracts in NSW for owners, builders and trades, and handles the variations, payment claims and defects that follow. Send a short description of the job and, where the work can be priced that way, you'll be sent a fixed-fee quote. The fee is agreed in writing before work starts, and the practice reviews the contract and other documents once it is engaged. Larger disputes are quoted stage by stage.
The work
Most building disputes begin in the contract, with a price whose exclusions nobody read, or variations agreed on site and never written down. Much of the practice's work sits at that stage: getting the contract right before it is signed, and setting up the paperwork the job will run on.
For owners having home building work done, whether they live there or not, the Home Building Act 1989 adds protections a commercial contract doesn't have: a written contract with set contents, a cap on the deposit, a cooling-off period, insurance in place before most larger jobs take any money, and statutory warranties that the contract cannot take away. The practice reads the builder's contract against all of them before you sign.
Once work is under way, the Building and Construction Industry Security of Payment Act 1999 runs on a fast timetable. Builders and trades use it to get paid. Whoever receives a payment claim, whether an owner, a developer, a head contractor or a subcontractor, has to answer it properly, or can end up owing the full amount claimed. The practice prepares payment claims and payment schedules, and runs adjudication applications and responses when it comes to that.
The practice acts for owners, developers, builders, trades and subcontractors, for one side of a job only.
What it covers
- Home building contracts, including the HIA and Master Builders forms and custom contracts
- Contract review before you sign
- Head contracts and subcontracts
- Variations and extensions of time
- Deposits and progress payments
- Payment claims and payment schedules
- Adjudication applications and responses
- Cooling-off certificates for owners
- Defects and statutory warranties
- Home building compensation insurance questions
- Termination and suspension notices
- NCAT home building claims
- Supply agreements and terms of trade for trades
Watch
Short films, each under a minute. One decided case, or a provision or a few related sections of an Act, told in plain words.
THE LAW SAYS
The payment schedule deadline
Has a payment claim been served on you? The clock is already running.
Read the transcript
A payment claim on a New South Wales construction job is served on you. You can reply with a payment schedule.
The deadline is ten business days after the claim is served, or the time your contract sets, whichever ends first.
Business days leave out Saturdays, Sundays, public holidays, and every day from the twenty seventh to the thirty first of December.
Miss that deadline and you become liable to pay the full amount claimed, on the due date for the payment.
Paying less than claimed? The schedule must say why. Diarise the claim the day it lands.
Have us draft your schedule. docetlegal.com.au
General information, not legal advice.
CASE IN POINT
Bellgrove v Eldridge: building defects and the cost to put them right
The foundations were so weak the only real fix was a rebuild.
Read the transcript
A two storey brick house, its foundations so weak the only real fix was to knock it down and build again.
In nineteen forty nine, a builder agreed to build a brick house for an owner, following set plans and specifications.
The concrete and mortar didn't follow the specifications. The trial judge found the house gravely unstable.
The Victorian Supreme Court assessed the owner's damages on the cost of demolishing and rebuilding. The builder appealed.
All three High Court judges agreed. The only real fix, a rebuild, was reasonable, and the damages based on it stood.
The High Court's starting point is the cost of making the work match the contract, if reasonable. Laws and your contract can change that.
Have your build contract reviewed. docetlegal.com.au
Dramatised from the published reasons of the High Court of Australia. General information, not legal advice.
How it works
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Before you sign
The contract is read against the job, and you get a plain list of what to change and what to ask for, the most important first.
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Paperwork the job can run on
For builders and trades, the practice prepares the contract, the variation form and the payment claim format, built for the day money is in question.
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When a claim or a schedule arrives
A payment schedule has to answer a payment claim within the time the contract allows or 10 business days after the claim is served, whichever comes first. Business days under the Act leave out weekends, public holidays and 27 to 31 December. Every reason for paying less has to be in the schedule, because reasons left out can't be raised later in an adjudication. If it comes to adjudication, the application has its own short deadlines, for example 10 business days after a payment schedule is received. The practice drafts the claim or the schedule and, where needed, the adjudication application or response.
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Defects and disputes
Defects are raised in writing, with the warranty period in mind. If the parties can't agree, either of you can ask Building Commission NSW to help resolve the dispute, and the practice can help you prepare for it. The Commission decides whether to send an inspector, who can order the builder to fix defective or incomplete work. If that doesn't settle it, the practice prepares a home building claim or defence in NCAT, for claims up to $500,000. In NCAT each party runs its own case and a lawyer appears only with the Tribunal's leave, so the practice prepares the papers and asks for leave where that will help. Larger claims and court proceedings go to a litigator.
Where the line is
- Court proceedings are the line. Any proceeding in a court, including a challenge to an adjudication determination, suing for an unpaid payment claim as a debt, or filing an adjudication certificate as a judgment, goes to a litigator, with the file prepared.
- Adjudication under the Security of Payment Act, home building claims in NCAT up to its $500,000 limit, appeals within NCAT, negotiation and mediation are within the practice. In NCAT a lawyer needs the Tribunal's leave to appear. An appeal from NCAT to a court goes to a litigator.
- One side of a job only. If the practice acts for the owner, it will not act for the builder on the same project, and the reverse. Before it takes on any job it checks for conflicts with its current and former clients, and it does not give a cooling-off certificate to an owner while it acts for that owner's builder on anything.
- The practice does not hold money in any job. Money paid under the contract, from the deposit to the final payment, passes between the parties, never through the practice.
Nobody pays anybody for a referral here, in either direction. How the practice hands work on →
Questions people ask
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Do I need a written contract for home building work in NSW?
Yes, once the price is over $5,000 including GST. Work over $5,000 and up to $20,000 needs a written contract, dated and signed, with the names of the parties, the builder's licence number, a description of the work, any plans and specifications, and the price if it is known. Above $20,000 the contract has to carry more, including the statutory warranties, a cooling-off statement, the cost of the home building compensation insurance, the price on the first page, the checklist in the approved form and an information sheet on the Security of Payment Act. The rules come from the Home Building Act 1989 and the Home Building Regulation 2014. Contracts between two licensed builders or trades, for work their licences cover, are treated differently.
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How much deposit can a builder ask for?
No more than 10% of the contract price for residential building work. On most jobs over $20,000, the builder must also have home building compensation insurance in place, and give you the certificate, before asking for any payment at all. The Act does not require that insurance to cover a developer, which in the Home Building Act means, broadly, someone who owns or will own four or more dwellings in the building or development.
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Can I get out of a building contract after signing?
On a home building contract over $20,000 you can usually rescind it by written notice within five clear business days after you receive a copy of the signed contract. If you weren't given a copy within five days of signing, the time runs from when you learn you were entitled to one. The builder can keep reasonable out-of-pocket expenses from what you have paid, and is entitled to a reasonable price for any work already done. Some contracts carry no cooling-off period, such as a contract with a developer (in the Home Building Act, broadly, someone who owns or will own four or more dwellings in the building or development), or one the owner prepared entirely. Building one or two homes to sell does not by itself make you a developer. If the contract leaves out the cooling-off statement, you may be able to rescind within 7 days of becoming aware of that. Outside those rights, ending a contract depends on its terms and the general law, so get advice before you send anything.
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The builder wants me to waive the cooling-off period. Can I?
Only if the contract has a clause that shortens or removes the cooling-off period, and you give the builder a certificate signed by a lawyer who does not act for the builder. The certificate has to say the lawyer explained the effect of the contract, what the certificate is, and what giving it to the builder means for you. The practice can give one after reading the contract with you, as long as it does not act for that builder in any matter. Giving up the cooling-off period is your decision, and you'll be told plainly what you give up before you sign.
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What is a payment claim, and what if I ignore it?
It is a written claim for a progress payment under the Security of Payment Act, and it has to say it is made under that Act. If you don't give a payment schedule within the time the contract allows or 10 business days after the claim is served, whichever comes first, you become liable to pay the whole amount claimed. A schedule that pays less has to give all your reasons, because you can't add new ones later. A builder without the right licence, or without required home building compensation insurance, has no right to a progress payment under the Act, but that point should still be raised in a payment schedule on time. The deadline runs whatever happens, and the practice can act only once a costs agreement is signed, so send the claim as soon as it arrives. Never ignore a payment claim.
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When does a progress payment have to be paid?
Under the Security of Payment Act, a payment from the owner or developer to the main builder is usually due 15 business days after the payment claim is made, and a payment to a subcontractor 20 business days after, unless the contract sets an earlier date. A contract can't push those dates later. Subcontracts on a job for a homeowner who lives, or plans to live, in the home work differently: payment is due when the subcontract says, or 10 business days after the claim if it says nothing. The Act covers homeowners too, so a builder can serve a payment claim on the owner of a home being built or renovated.
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How long do I have to claim for defects?
Proceedings for breach of a statutory warranty must start within 6 years for a major defect and 2 years for other defects. Most defects fall in the 2 year group, because "major defect" has a narrow meaning in the Act. The time runs from completion of the work or, if the work was never finished, from when the contract ended or work stopped. If a defect first becomes apparent in the last 6 months of that period, there are 6 more months. A complaint to Building Commission NSW does not stop the time running; only starting proceedings in NCAT or a court does. Raise defects in writing as soon as you see them, and get advice well before the period ends.
The rules on this page are stated as at 22 October 2026. When the practice takes on your job, it checks the law in force at that time.
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Make an enquiry
Send a short note about what is happening. You will hear back within one business day with whether the practice can help and the fee basis. The fee is confirmed in writing before any work starts.