As a developer, what should you do before signing a domestic building contract?
As a developer, there are a number of things that you should do before signing a domestic building contract.
Know your builder
As a developer, you take a number of risks when you employ a builder so it is very important that you do some background work.
Questions that you may want to ask your builder may include:
- How long they have been in the industry?
- How many properties they have built?
- Whether you can inspect them?
- Whether you can speak to past clients?
Also, you want to make sure that you discuss your expectations with your builder and have them detailed in the contract. This is very important as it leaves less room for disagreement and disappointment.
Finally, make sure your builder is registered with the Building Practitioners Board. Sure, you may know someone who can do it cheaper for you, but does he or she have a practicing certificate? If not, know that it is an offence to knowingly employ an unregistered builder.
Make sure you are insured.
Builders are not immune to insolvency, disappearance or death. Fortunately, you can take steps to protect yourself from this by making sure that your builder has taken out home warranty insurance. It is important that this occurs before work is commenced because you want to allow sufficient time to familiarize yourself with your policy.
It is worth noting that the law does not require an insurer to honor every claim. For example, an insurer is not legally obliged to honor a developer’s claim for completion costs. As such, you should make a note of any clauses that limit your ability to make a claim and seek legal advice as soon as possible.
Read your contract
Building on what has been said above, it is vital that you read your contract.
In particular, you should make note of the completion date. Additionally, you should make sure that you can visit the site during construction and make variations.
Finally, you should know when you are permitted to cancel the contract. For example, can you cancel the contract if the development is not approved by the council? Or, what about if it just isn’t viable? In such cases, you want to make sure that you can elect to cancel the contract with very little to no penalty.
For more information and a free consultation call Boutique Lawyers on 1300 556 140.