Builder Contract: 20 Questions to Ask Before Signing

  • Author
    Ed Jones
  • Published
    28 January 2024

Embarking on the journey of building a new home or investment property in Victoria, Australia, can be both exhilarating and daunting. Signing a build contract is one of the early steps in this process, and the best builds on the right foot. The success of your project largely depends on the builder you choose. It’s paramount to establish a clear and mutual understanding from the outset. In this blog post, we’ll explore 20 essential questions to ask your builder before signing any contract. For each question, we’ll delve into why it’s important and identify signals that might indicate the need for external advice or support.

Okay -let’s get into it.

20 questions to ask before signing a builder contract:

  1. Can You Provide a Detailed Written Quote?
    • Why This Matters: A detailed written quote lays the foundation for your financial planning. It should clearly break down the costs, materials, and labour involved in your project. This transparency is key to avoiding unexpected expenses and ensuring that the project aligns with your budget.
    • Signs You Need External Support: If the builder is hesitant to provide a detailed quote or the quote is vague, it’s a red flag. In such cases, seeking external financial advice or a second opinion is crucial to ensure you’re getting a fair and realistic estimate.
  2. Are You Licensed and Insured in Victoria?
    • Why This Matters: Confirming that your builder is licensed and insured in Victoria is critical. This not only assures their credibility but also protects you against any potential liabilities, such as accidents or construction errors.
    • Signs You Need External Support: If a builder cannot produce current licensing or insurance documentation, it’s a cause for concern. It’s advisable to consult with legal or construction experts to understand the implications and explore alternative options.
  3. Can You Provide References or Examples of Previous Work?
    • Why This Matters: Reviewing a builder’s past projects and speaking with former clients gives you a sense of their craftsmanship and reliability. It’s an opportunity to gauge their experience and expertise in projects similar to yours.
    • Signs You Need External Support: Be wary if the builder is unable or unwilling to provide references. In such instances, it’s wise to engage a building consultant or conduct independent research to verify the builder’s track record.
  4. What is the Estimated Timeline for the Project?
    • Why This Matters: Understanding the project timeline is essential for planning and setting realistic expectations. It also helps you coordinate other aspects of your life around the construction schedule.
    • Signs You Need External Support: If the builder proposes an unrealistic timeline or is vague about deadlines, it’s advisable to seek a second opinion. A construction management expert can help assess the feasibility of the proposed timeline.
  5. How Do You Handle Changes or Variations to the Original Plan?
    • Why This Matters: It’s not uncommon for changes to occur during a building project. Knowing how your builder manages and prices these changes is crucial to avoid misunderstandings and unexpected costs.
    • Signs You Need External Support: If your builder is inflexible about changes or lacks a clear policy on variations, consider seeking advice from a construction advisor. They can provide guidance on standard practices and help negotiate more favourable terms.
  6. What Warranties and Guarantees Do You Offer?
    • Why This Matters: Warranties and guarantees are your safety net, ensuring that any post-construction issues will be addressed. Understanding the extent and duration of these warranties is key for your long-term peace of mind.
    • Signs You Need External Support: A builder offering limited or unclear warranties is a concern. In such cases, consulting with a construction lawyer or a building consultant can help you secure comprehensive coverage.
  7. How Do You Communicate Updates and Progress?
    • Why This Matters: Effective communication is the cornerstone of any successful building project. Regular updates keep you informed and involved in the project, enabling prompt decisions and adjustments when necessary.
    • Signs You Need External Support: If the builder lacks a structured communication plan or has a history of poor communication, it might be prudent to involve a project manager. They can facilitate effective communication and ensure your interests are represented.
  8. Who Will Supervise the Construction Site?
    • Why This Matters: Knowing who is in charge of the daily operations on your construction site is vital. This supervisor is your point of contact for on-the-ground decisions and updates. The supervisor is a key representative of the site, and plays a significant role in ensuring your builder delivers what is outlined in the builder contract.
    • Signs You Need External Support: An inexperienced supervisor or a builder who doesn’t appoint a specific person for this role can jeopardise the project’s success. In such scenarios, hiring an independent construction supervisor might be necessary to oversee the project and ensure quality standards.
  9. What Quality Control Measures Do You Have in Place?
    • Why This Matters: Quality control is essential in construction. It ensures that the build is up to standard and meets your expectations. Understanding the measures your builder takes to maintain quality throughout the construction process is crucial.
    • Signs You Need External Support: If your builder has vague or non-existent quality control procedures, it’s a warning sign. In such cases, hiring a third-party quality inspector can provide an additional layer of oversight and peace of mind.
  10. How Are Subcontractors Selected and Managed?
    • Why This Matters: Subcontractors play a significant role in your build, often handling specialised aspects of the construction. Knowing how your builder selects and manages these subcontractors is important to ensure they meet the same standards of quality and professionalism.
    • Signs You Need External Support: If the builder uses unverified subcontractors or has a history of poor subcontractor management, it’s advisable to consult with a construction management expert. They can help in vetting subcontractors and ensuring effective coordination.
  1. What Are the Payment Terms and Schedule?
    • Why This Matters: Understanding the payment schedule is crucial for your financial planning. It should align with key project milestones, ensuring that payments correspond with completed work. The payment terms and schedule should be clearly communicated in the builder contract.
    • Signs You Need External Support: If the payment terms seem unusual, such as demanding a large upfront payment or full payment before completion, it’s advisable to seek financial advice. A construction financial advisor can help negotiate terms that protect your interests.
  2. How Do You Handle Site Preparation and Clean-up?
    • Why This Matters: Proper site preparation and clean-up are indicative of a builder’s professionalism and respect for your property. It also impacts the efficiency and safety of the construction process.
    • Signs You Need External Support: If the builder has no clear plan for these aspects, consider consulting an independent construction manager. They can ensure that site preparation and clean-up are conducted to industry standards.
  3. Can You Provide a Detailed Contract Outlining All Terms and Conditions?
    • Why This Matters: A detailed contract is your legal safeguard. It should clearly outline all terms, conditions, responsibilities, and expectations. This document is essential for resolving any disputes or misunderstandings that may arise.
    • Signs You Need External Support: If the builder is reluctant to provide a detailed contract or if the contract seems incomplete, it’s imperative to consult a construction lawyer. They can help draft a contract that covers all necessary aspects and protects your rights.
  4. How Do You Manage Building Permits and Regulations Compliance?
    • Why This Matters: Adherence to building permits and regulations is mandatory. Your builder should be knowledgeable and proactive in obtaining all necessary permits and ensuring that the construction complies with local regulations.
    • Signs You Need External Support: Uncertainty or ignorance about permits and regulations is a major red flag. In such cases, hiring a construction consultant familiar with local laws can help navigate the legal complexities.
  5. What Is Your Policy on Environmental Sustainability?
    • Why This Matters: With growing environmental concerns, understanding the builder’s approach to sustainability is important. This includes the use of eco-friendly materials, waste management, and energy-efficient construction practices.
    • Signs You Need External Support: If the builder has little to no consideration for environmental practices, you might want to consult with a sustainability expert. They can advise on incorporating green building practices into your project.
  6. How Is On-site Safety Managed?
    • Why This Matters: A commitment to on-site safety reflects a builder’s professionalism and care for their workforce. It’s essential to ensure that all safety regulations and standards are strictly followed.
    • Signs You Need External Support: Poor safety protocols or a history of on-site accidents should raise concerns. In such situations, engaging a health and safety inspector can provide an independent assessment of safety practices.
  7. What Happens in the Case of Unforeseen Issues or Delays?
    • Why This Matters: Construction projects can face unexpected challenges. Knowing how your builder plans to address unforeseen issues or delays is vital for maintaining the project timeline and budget. These are details that should be clearly stated and evident in your builder contract.
    • Signs You Need External Support: If the builder has no contingency plans or is vague about handling delays, it’s advisable to consult with a construction project manager. They can assist in developing a robust contingency plan.
  8. How Are Project Costs Tracked and Reported?
    • Why This Matters: Transparent tracking and reporting of project costs help you stay informed about the financial status of your project. It allows for timely adjustments if costs deviate from the initial budget.
    • Signs You Need External Support: A lack of transparency in cost tracking and reporting is concerning. In such cases, hiring a financial auditor or a construction accountant can ensure accurate and transparent cost management.
  9. Can You Provide a List of All Included and Excluded Items in the Build?
    • Why This Matters: Understanding what is included and what is excluded in the contract helps in setting clear expectations. It ensures that both you and the builder are aligned on what the project entails. These inclusions and exclusions should be noted in the builder contract where ever possible.
    • Signs You Need External Support: Ambiguity in inclusions and exclusions can lead to disputes. Consulting a construction lawyer or a contracts specialist can help clarify these details and prevent future misunderstandings.
  10. What Is Your Process for Handling Disputes or Complaints?
    • Why This Matters: Even with the best planning and a clear build contract, disputes may arise. A clear process for handling disputes or complaints indicates the builder’s commitment to resolving issues amicably and professionally.
    • Signs You Need External Support: If the builder lacks a dispute resolution process or has a history of unresolved disputes, it’s crucial to have advice. Ninedots Build Advocates provide Build Consulting for these types of issues, and we can provide guidance on resolving disputes and protecting your interests.

Builder Contracts: All covered?

Asking these 20 questions before signing a builder contract will give you a comprehensive understanding of their capabilities, processes, and the nature of your impending partnership. That being said, a builder contract can be out of many people’s comfort zones and it’s important to get help when you need it. Always remember, if at any point you feel uncertain or encounter red flags, seeking external advice is not just advisable, it’s essential for the success of your project. Your home or investment property is a significant venture, and ensuring it’s in capable hands is your right and responsibility.

If you’re starting the process of a build for your a home or investment property, start with a FREE 20 minute build discovery call with Ninedots Build Advocates. It would be a pleasure to make sure you’re heading in the right direction, and we can support you through the build process in a number of ways. We look forward to hearing from you!

Further Information

In addition to details on builder contracts, here are five Victorian resources that can provide further information on building a home or investment property:

  1. Victorian Building Authority (VBA): The VBA offers a wealth of information on various aspects of building in Victoria. They have resources on finding practitioners, understanding contracts, coordinating building work, and how to effectively communicate with your builder. They also provide guidance on resolving common building problems and disputes. For more information, visit VBA’s Building Information.
  2. Consumer Affairs Victoria: This is an excellent resource for those looking to plan and manage their building or renovation projects. They provide information on dealing with building defects, delays, and insolvency, as well as useful checklists to guide you through the process. Visit Consumer Affairs Victoria for more details.
  3. Sustainability Victoria: Focused on promoting environmental sustainability, this resource offers insights into energy efficiency in building and renovating. They provide questions to ask your builder about energy efficiency and key principles of energy-efficient design. Check out Sustainability Victoria for resources on sustainable building practices.
  4. Victorian Government Housing and Property Information: This government portal provides comprehensive information about buying, renting, building, or renovating a home in Victoria. It covers topics like affordable housing, home improvement grants, and advice for first-time homebuyers. For more, visit VIC Government Housing and Property.
  5. VICSmart Planning Guide: This resource offers information about planning permits in Victoria. It’s useful for understanding the planning process, including permits and applications, and how they relate to your building project. Access more information on planning permits through VICSmart Planning Guide.

These resources should give you a comprehensive overview of what’s involved in building a new home or investment property, and can assist you in making informed decisions throughout your building journey.