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NEW HOME CONSTRUCTION CONTRACTNEW HOMECONSTRUCTIONCONTRACTSuitable for the construction of a new home (ormulti-dwelling construction) under a lump sumcontract price, as covered under theHome Building Act 1989 (NSW)Owner Name:Site Address:Date:1OWNERBUILDER
NEW HOME CONSTRUCTION CONTRACTTABLE OF CONTENTSCHECKLISTSchedule 1 – Contract DetailsSchedule 2 – Progress PaymentsSchedule 3 – Allowances for Prime Cost and Provisional Sum ItemsSchedule 4 – Excluded ItemsSchedule 5 – Warranty InsuranceSchedule 6 – Special ConditionsSchedule 7 – Signatures1. Definitions2. Primary Obligations3. Preliminary Matters4. Security Account5. Ability to Pay6. Accuracy of Contract Documents7. Planning and Building Approvals8. Commencing the Building Works9. Delays and Extensions of Time10. Survey of the Site11. Site Possession and Access12. Latent Site Conditions13. Additional Costs14. Contract Price Adjustments15. Progress Payments16. Interest on Late Payments17. Variations18. Excluded Items19. Materials Supplied by the Owner20. Specified Materials21. Prime Cost and Provisional Sums22. Assignment and Sub-contracting23. 9.40.41.42.43.44.45.2IndemnityInsurancesPractical CompletionFinal CertificateEarly PossessionContract Maintenance PeriodDefects and First Right of RectificationTermite Treatment and MaintenanceDelay DamagesCharge on the SiteSuspensionTermination (Serious Breach)Termination (Insolvency)Effect of the Builder TerminatingEffect of the Owner TerminatingDebt Collection CostsStatutory WarrantiesDispute ResolutionNoticesNo WaiverSeveranceMandatory ConditionsOWNERBUILDER
NEW HOME CONSTRUCTION CONTRACTChecklist for Owners entering into building contractsCHECKLIST YES YES 1Does the contractor hold a current contractor licence?2Does the licence cover the type of work included in the contract?3Is the name and number on the contractor’s licence the same as on thecontract?4Is the work to be undertaken covered in the contract, drawings or specification? YES5Does the contract clearly state a contract price or contain a warning that thecontract price is not known?6If the contract price may be varied, is there a warning and an explanation about YEShow it may be varied?7Are you aware of the cooling off provisions relating to the contract?8Is the deposit within the legal limit? The limit is 10% for work costing 20,000or less or 5% for work costing more than 20,000.9Is the procedure for variations understood?10Are you aware of who is to obtain any council or other approval for work?11Do you understand that the contractor must have a policy of home warrantyinsurance under the Home Building Act 1989 and provide you with a certificateof insurance before receiving any money under the contract (including a deposit)or before doing any work for more than 20,000?12Has the contractor given you a document that explains the operation of theHome Building Act 1989 and the procedures for the resolution of contract andInsurance disputes? NO NO YESNO YES NO NO NO YES NO YESNO YES YES NO NO YESYES NO NO SIGNATURESDo not sign this contract unless you have read and understand the clauses as well as the notes and explanationscontained in this document.If you have answered “no” to any question in the checklist, you may not be ready to sign the contract.Both the contractor and the owner should retain an identical signed copy of this contract including drawings, specificationsand other attached documents. Make sure that you initial all attached documents and any attachments or deletions to thecontract.SIGNED COPY OF THE CONTRACTUnder the Home Building Act a signed copy of the contract must be given to the owner within 5 working days after thecontract is entered into.HOME WARRANTY INSURANCEThe contractor must provide the owner with a certificate of home warranty insurance (for work over 20,000) beforecommencement of work and before demanding or receiving payment.OWNER’S ACKNOWLEDGEMENTI/We have been given a copy of the Consumer Information Brochure and I/We have read and understand it.I/We have completed the check list and answered “Yes” to all items on it.Note: Where the owner is a company or partnership or the contract is to be signed by an authorised agent of the owner,the capacity of the person signing the contract, eg director, must be insertedSignatureSignatureName [print]Name [print]Capacity [print]Capacity [print]3OWNERBUILDER
NEW HOME CONSTRUCTION CONTRACTSchedule 1 – Contract DetailsITEM1. This contract is dated the day of , 202. Owner(s)Name:Address:Phone (H): (W):Fax: Mobile:Email: A.B.N:3. Builder(s)Name:Address:Phone (H): (W):Fax: Mobile:Email: A.B.N:Builder’s Licence No.4. Contract PricePrice excluding GST: GST on the above amount: The contract price is (in words) (the contract price is GST inclusive)WARNING: The contract price may vary under this contract due to: 4OWNERBUILDER
NEW HOME CONSTRUCTION CONTRACT5. DepositThe deposit is Note that the deposit must not be:(a) more than 5% if the contract price is more than 20,000; or(b) more than 10% if the contract price is 20,000 or less.6. Sources of fundsThe contract price will be funded by:the owner the lending authority other TOTAL FUNDS (The total funds should be equal to the contract price)7. The SiteThe site is land at: Lot DP No.Certificate of Title:Street Address:Mortgages 1. Lending Body: Amount Branch:Contact Name:2. Lending Body: Amount Branch:Contact Name:8. Encumbrances, covenants and easementsThe land relating to the site as identified in item 6 above is affected by the followingencumbrances, covenants, easements and caveats (give the substances of each affectation,and details of any registrations where registered at the Titles Office).5OWNERBUILDER
NEW HOME CONSTRUCTION CONTRACT9. Builder’s MarginThe builder’s margin is % (if nothing stated, then 20%).10. InterestInterest on late payments is % (if nothing stated, then 10% per annum calculated daily)11. Planning and Building ApprovalsThe party to obtain and pay for all planning and building approvals is(if no party is stated, then thebuilder).12. Contract PeriodThe building works must reach the stage of practical completion no more thanweeks after the contract period commenced under Clause 8, as extended under Clause 9.13. Delay Damages per working day, calculated on a daily basis.(If nothing stated, then 1)14. Other Contract DocumentsIn addition to these general terms, any special conditions, the plans and specifications, thefollowing documents form part of this contract:1.2.3.4.15. Guarantors6OWNERBUILDER
NEW HOME CONSTRUCTION CONTRACTSchedule 2 – Progress PaymentsSTAGEPERCENTAGEAMOUNT1% 2% 3% 4% 5% 6% TOTAL AMOUNT100% Note: The TOTAL AMOUNT must be the same as the contract price.7OWNERBUILDER
NEW HOME CONSTRUCTION CONTRACTSchedule 3 – Allowances for Prime Cost andProvisional Sum ItemsTable ADescription of Each Prime Cost ItemBuilder’sAllowanceQuantityPrime CostAllowancesDescription of Each Provisional SumItemEstimatedquantity ofcomponentsor lProvisionalSumAllowancefor LabourandMaterials1234567Table B12345678OWNERBUILDER
NEW HOME CONSTRUCTION CONTRACTSchedule 4 – Excluded ItemsThe owner acknowledges that the builder is not responsible forthat are listed below:Schedule 5 – Warranty InsuranceNote: The builder must not carry out any of the building works, or demand or receive any part ofthe contract price (including a deposit) until warranty insurance is in force, and the owner isprovided with the certificate of insurance.Insurer Name:Insurer Address:Phone: Fax:Name of insured (owner):Premium payable:ATTACH CERTIFICATE HERE9OWNERBUILDER
NEW HOME CONSTRUCTION CONTRACTSchedule 6 – Special Conditions10OWNERBUILDER
NEW HOME CONSTRUCTION CONTRACTSchedule 7 – Signatures1.2.3.4.5.6.This contract is made between the owner and the builder.The Schedules form part of this contract.The Table of Contents and the Checklist do not form part of this contract.The parties have signed this contract on the date stated in Item 1 of Schedule 1.The owner acknowledges that it has received the Checklist and the Consumer BuildingGuide before signing this contract.The owner has read and understood this contract.OWNER 1OWNER 2Name:Name:Owner’s Signature:Owner’s Signature:Witness’ name and signature:Witness’ name and signature:Witness’ address:Witness’ address:BUILDERName:PLEASE NOTE THESE EXAMPLESBuilder’s Signature:When signing on behalf of a Partnership:A Smith (signed) Partner, signed for andon behalf of ABC BuildingWitness’ name and Signature:When signing on behalf of a Corporation:A Smith (signed) Director, signed for andon behalf of ABC Building Pty LtdWitness’ Address:STATEMENT SETTING OUT THE OWNER’S RIGHT TO TERMINATE THIS CONTRACTUNDER SECTION 7BA OF THE HOME BUILDING ACTThis contract may be subject to a cooling-off period that entitles the owner to rescind this contractby giving a notice in writing as required by Section 7BA of the Home Building Act 1989:(a) If the owner has been given a copy of the signed contract – at any time before theexpiration of 5 clear business days after the owner is given a copy of the signed contract; or(b) If the owner has not been given a copy of the signed contract within 5 days after thecontract has been signed – at any time before the expiration of 5 clear business days afterthe owner becomes aware that the owner is entitled to be given a copy of the signedcontract.If the owner terminates this contract under Section 7BA of the Home Building Act 1989, thebuilder is entitled to a reasonable price for the work carried out under the contract up to thedate this contract is rescinded.11OWNERBUILDER
NEW HOME CONSTRUCTION CONTRACTClause 1 – Definitions1.1In this contract:“all weather access” meansby the builder forcarrying out the building works;“builder” means the party named in Item 3 of Schedule 1 and, whereappropriate, includes the builder’s appointed agent / representative;“builder’s margin” means the percentage stated in Item 9 of Schedule 1;“building works” means the building works to be carried out, completedand handed over to the owner in accordance with this contract as shownin the contract documents, and shall include all variations;“contract” means the agreement between the builder and the owner as setout in the contract documents;“contract documents” means these general terms, any special conditions,the plans, the specifications, and any other documents specified in Item14 of Schedule 1;“contract period” means the amount of time specified in Item 12 ofSchedule 1, which can be extended under clause 9;“contract price” means the amount stated in Item 4 of Schedule 1, and thisamount can change under this contract;“contract price adjustment” means an amount that is added to or deductedfrom the contract price under this contract;“date of practical completion” means the date that is deemed to be thedate of practical completion under Clause 26, except where the date isdetermined by dispute resolution (including litigation), then it is that date;“inclement weather” means any weather that,work from being carriedout in the usual manner;“preliminary period” means a period of 15 working days from the date ofthis contract;“lending authority” means any institution that lends the owner part of or thewhole of the contract price;12OWNERBUILDER
NEW HOME CONSTRUCTION CONTRACT“notice of practical completion” means the written notice given by thebuilder to the owner under sub-clause 26.1;“owner” means the party named in Item 2 of Schedule 1, and includes theowner’s agents, employees and invitees;“practical completion” means when the building works are complete,except for;“rock” means any material, other than clay or soil, that cannot, in thebuilder’s opinion, be readily removed by hand;“security account” means an account described in Clause 4;“site” means the land described in Item 7 of Schedule 1;“stage” means any of the stages described in Schedule 2;“statutory authority” means a Local, State or Federal Government, or anygovernment agency that has the power to affect the building works;“variation” means:(a) any to the building works; or(b) a change in the out the building works;“working days” means any day other than a Saturday, Sunday or a publicholiday;and like words have corresponding meanings.1.2In this contract, the table of contents, general notes and clause headingsdo not form part of this contract and cannot be used in its interpretation.13OWNERBUILDER
NEW HOME CONSTRUCTION CONTRACTClause 2 – Primary Obligations of the Parties2.12.22.3The builder must carry out and complete the building works in accordancewith this contract.The owner must pay the contract price and other money that becomespayable under this contract in the manner and at the times stated in thiscontract.If there is more than one owner:(a) the obligations in this contract apply to , and to;(b) a quote, notice, claim or any other communication to the owners is only;(c) only is required to sign a document (including aquote, notice, instruction, direction or other communication) or to givean instruction, direction or other communication, to legally bind.Clause 3 – Preliminary Matters3.13.23.3The owner must, within the preliminary period, give the builder:(a) written proof that the owner holds the legal title to, or is otherwiseentitled to build on, the site, and written details of any encumbrances,covenants, easements and caveats affecting the site;(b) if required by the builder, written evidence that the security accounthas been set up and the amount required to be deposited into thesecurity account is held in clear funds;(c) if the owner is obtaining finance from a lending authority, writtenadvice from the lending authority that:(i) the amount of finance, when added to the owner’s own availablefunds, is sufficient to pay the contract price; and(ii) the building works are authorised to commence.If the owner fails to satisfy any of the above within the preliminary period,the builder may.If the builder , the owner must pay to thebuilder any related costs incurred by the builder up to the date thiscontract is terminated, plus the builder’s margin applied to these costs.These related costs include, but are not limited to, the cost of materials onthe site or already having being ordered from suppliers that are notreturnable.14OWNERBUILDER
NEW HOME CONSTRUCTION CONTRACTClause 4 – Security Account4.14.2When requested by the builder at any time, the owner must deposit thatportion of the contract price not being supplied by a lending authority intoan account (the “security account”) at a bank, building society, or asimilarly recognised financial institution.The security account must be in the joint names of the owner and thebuilder, with:(a) the owner receiving interest, if any is payable, on the money depositedin the account; and(b) the builder as a joint signatory for any withdrawal from the account.Clause 5 – Ability to Pay5.1The owner must, within of being requested by the builder atany time, give the builder written evidence, to the builder’s satisfaction, ofthe owner’s ability to pay all money that is or may become payable to thebuilder under this contract.Clause 6 – Accuracy of Contract Documents6.16.26.36.4Where the owner supplies any contract document, the owner warrants thatcontract document is accurate and the suitability of the design, materialsand methods of working each specified therein.If either party becomes aware of an error, ambiguity or inconsistency in orbetween the contract documents, that party must, within 2 working days ofbecoming aware, give the other party a written notice detailing such anerror, ambiguity or inconsistency.The owner must, within 2 working days of receiving a notice or becomingaware of an error, ambiguity or inconsistency in or between the contractdocuments, give the builder written instructions detailing how the builder isto proceed with the building works.If the owner fails to give the builder such written instructions within 2working days, the builder may proceed with the building works, applyingthe contract documents in the following order of precedence:(a) ;(b) ;(c) ;(d) ; and(e) any other documents specified in Item 14 of Schedule 1.15OWNERBUILDER
NEW HOME CONSTRUCTION CONTRACT6.56.66.76.8If:(a) compliance with the owner’s instructions or the order of precedence,whichever is applicable, involves more or less cost than a reasonablebuilder would have anticipated upon the signing of this contract; and(b) the error, ambiguity or inconsistency is caused by documents otherthan those provided by the builder,the owner is deemed to have asked the builder for a variation to carry outthe necessary work, and the owner must promptly sign the relevant writtenvariation when produced by the builder.If an error, ambiguity or inconsistency caused by documents other thanthose provided by the builder will most likely result in the contract pricebeing increased or decreased by more than , or will result in asubstantial alteration in the original nature of the building works:(a) the builder will be entitled to terminate this contract, within 15 businessdays of becoming aware of:(i) the error, ambiguity or inconsistency; and(ii) the likely change to the contract price,by giving the owner a written notice to that effect; and(b) the builder will be entitled to be paid at least the cost of the buildingworks completed at the date of termination, plus the builder’s marginon that cost.In relation to a document that is:(a) supplied by;(b) prepared under instruction of; or(c) prepared from sketches provided by,a party, that party indemnifies the other party for all costs, expenses,losses or damages that are incurred by the other party relating to or as aconsequence of any claim for breach of copyright or moral right arisingfrom the builder carrying out the building works in accordance with thatdocument.The builder owns the copyright in any document prepared by or on behalfof the builder.Clause 7 - Planning and Building Approvals7.17.27.37.4The party named in Item 11 of Schedule 1 must obtain and pay for allbuilding and planning approvals.If the builder is named in Item 11 of Schedule 1, the owner authorises thebuilder to sign any document necessary to obtain the approvals.If the owner is named in Item 11 of Schedule 1, the owner must bothobtain and give the approvals to the builder promptly.If the requirements of a statutory authority necessitate a change to thebuilding works, the builder must inform the owner of the change requiredand ask for a variation for the building works to comply with therequirements.16OWNERBUILDER
NEW HOME CONSTRUCTION CONTRACT7.5If the owner agrees to a variation when asked for by the builder under subclause 7.4, the owner must promptly sign the relevant written variationwhen produced by the builder.Clause 8 - Commencing the Building Works8.18.28.3The builder must commence the building works within working daysafter the day that:(a) the builder receives all the necessary building permits and planningapprovals required for the building works to commence; or(b) the owner satisfies all of the requirements of sub-clause 3.1,whichever is later.The contract period commences on the working day after bothare satisfied.The contract period will commence in accordance with sub-clause 8.2even if the builder .Clause 9 – Delays and Extensions of Time9.19.2The builder shall be entitled to a reasonable extension of the contractperiod if the building works are delayed by the builder suspending thebuilding works under Clause 34, or from a cause, thing or matter beyondthe sole control of the builder, including (but not limited to):(a) a variation, or a request for a variation by the owner;(b) an act of God, fire, explosion, earthquake, civil commotion or an act ofterrorism;(c) inclement weather, or conditions resulting from inclement weather;(d) an industrial dispute;(e) a dispute with adjoining or neighbouring residents or owners;(f) any act or omission by the owner;(g) delays in obtaining any approvals;(h) by the owner;(i) the need for a survey of or other report in relation to the site, includingthe existence of latent site conditions; or(j) the industry shutdown, being a 5 week period commencing on or about22 December in each year.The builder is to give the owner written notice of an entitlement to anextension of time detailing both:(a) the extension of time; and(b) the cause of the delay,within after becoming aware of both and theof the delay.17OWNERBUILDER
NEW HOME CONSTRUCTION CONTRACT9.39.49.59.6A failure on the builder’s part to comply with sub-clause 9.2 will not in itselfto a reasonable extensionof the contract period.If the owner wishes to dispute the builder’s entitlement to an extension oftime the owner must, within working days of receiving the builder’snotice, give the builder a written notice:(a) disputing the extension of time; and(b) detailed reasons why the extension of time is disputed.If the owner fails to give the builder a written notice in accordance withsub-clause 9.4, the owner will be .If the carrying out of the building works are delayed in any way by an act,default or omission of the owner, damages for such a delay, being thetotal of the the builder to carry out thebuilding works, plus , are due and payableby the owner to the builder on demand.Clause 10 – Survey of the Site10.110.2If, in the builder’s opinion, the boundaries of the site are , thebuilder may give the owner a written notice requesting that the ownerprovide a survey of the site.If the owner does not provide a survey of the site within working days ofthe builder giving the written notice, the builder willsurvey. The owner must pay to the builder on demand the total of, plus .Clause 11 – Site Possession and Access11.111.211.311.4The owner gives the builder exclusive and uninterrupted possession of thesite to carry out the building works.The owner must provide all weather access. If the owner does not provideall weather access, and the builder is required to carry out additional workto achieve such access, the owner is deemed to have asked the builderfor a variation to carry out that additional work, and the owner mustpromptly sign a written variation when produced by the builder.The owner must not, or must not allow agents or officers of the lendingauthority to:(a) builder’s access or possession of the site; or(b) progress of the building works.The owner must not, or must not allow agents or officers of the lendingauthority to:(c) make inquiry of; or(d) issue directions to; or18OWNERBUILDER
NEW HOME CONSTRUCTION CONTRACT11.511.6(e) give instructions to,the builder’s employees, subcontractors or agents. All communicationmust only be with the builder, or the builder’s nominated person.The owner must not, or must not allow an officer of the lending body, tohave access to the site or the building works for any purpose, including forthe purpose of inspecting the progress of the building works, unless:(a) the owner has given the builder or the builder’s nominated person atleast notice; and(b) access to the site or the building works is at reasonable times.The builder’s unused materials on the site are the property of the builder.Clause 12 – Latent Site Conditions12.112.212.312.412.512.6If:(a) either party believes that the surface or sub-surface conditions of thesite may not support or are likely to affect the building works, or(b) rock is found at the site,the builder may, or must at the owner’s written request, as the owner’sagent, engage a to report on the site’s conditionsand their effect on the building works, and the cost of every consultantengaged is to be paid by the owner as a contract price adjustment.The builder must promptly give the owner a notice specifying the details ofany , and the . Thebuilder must attach a copy of any written report obtained fromunder sub-clause 12.1, to that notice.The owner must, within 5 working days of receiving such notice, give thebuilder a signed written notice instructing the builder to proceed with theadditional work required for the building works as detailed by the builderunder sub-clause 12.2.If the owner does not give the builder written notice under sub-clause12.3, the builder may do either or both of the following:(a) suspend the carrying out of the building works under Clause 34;(b) terminate this contract, whereby Clause 37 will apply.The builder is only entitled to payment for such additional work if theactual site conditions differ from those either:(a) prior to this contract being signed; or(b) shown in the contract documentsand if the effect of that difference requires more or less work than thatwhich a reasonably competent builder would have anticipated on thesigning of this contract.If the estimated price of the additional work exceeds % of the contractprice, the owner may terminate this contract by the giving the builder awritten notice to that effect within working days of receiving theestimated cost from the builder under sub-clause 12.2.19OWNERBUILDER
NEW HOME CONSTRUCTION CONTRACT12.7If the owner terminates this contract under sub-clause 12.6, the ownermust pay to the builder the that this contract isterminated. The price includes the builder, whichincludes .Clause 13 – Additional Costs13.113.2If, after this contract is signed, a statutory authority introduces orincreases:(a) any ; or(b) any that affects the building works,that either directly or indirectly causes any increase in the cost of thebuilding works to the builder, there will be a contract price adjustment toreflect such a cost increase.If the builder is required to do more or less work to comply with arequirement of a statutory authority, the builder must ask for a variation forthe change required, and the owner must promptly sign the relevantwritten variation when produced by the builder.Clause 14 – Contract Price Adjustments14.1A contract price adjustment is due and payable at the next progresspayment after it arises, unless a different time is agreed between theparties.Clause 15 – Progress Payments15.115.215.315.4The owner must pay the deposit stated in Item 5 of Schedule 1:(a) when this contract is signed by the owner; or(b) when warranty insurance described in Schedule 5 is in force, and theowner is provided with the relevant certificate of insurance,whichever is later, and the deposit shall be deducted from the firstprogress payment.The owner must pay the contract price progressively as claimed by thebuilder, and it shall not be a defence that the owner failed to pay by thedue date because the lending authority failed to forward payment to theowner.In order to be entitled to a progress payment, the builder must give theowner a written progress payment claim for the substantial completion ofeach stage.A progress payment claim is to state:20OWNERBUILDER
NEW HOME CONSTRUCTION CONTRACT15.515.6(a) the amount claimed and not paid for the stages substantiallycompleted;(b) the amount claimed and not paid for contract price adjustments;(c) the amount claimed and not paid for variations; and(d) the sum of the above amounts.The owner must pay the amount stated in the progress payment claimwithin 5 working days of the builder giving the claim.Other than in relation to the final progress claim:(a) payment of a progress claim is on account only; and(b) the owner has no right of set-off.Clause 16 – Interest on Late Payments16.1The builder shall be entitled to interest at the rate stated in Item 10 ofSchedule 1 from the day on which an amount falls due to be paid to thebuilder by the owner, up to and including the day that the amount is paid.Clause 17 – Variations17.117.217.317.417.517.6A variation must be:(a) in writing; and(b) signed by the builder and the owner.Either the owner or the builder may ask for a variation.However, a failure to comply with sub-clause 17.1 will notthat was the subject of avariation verbally requested by the owner.If the owner asks for a variation, the builder must reply in writing as soonas is reasonable.The reply is to be either:(a) a signed written offer to carry out the variation detailing:(i) ;(ii) ; and(iii) ; or(b) a refusal to carry out the variation. The builder is not required to give.If the owner does not give to the builder signed written acceptance of thebuilder’s offer within working days of the builder giving the reply, thebuilder’s offer is deemed to be withdrawn.If the price of a variation is not agreed upon prior to it being carried out,that price will be determined by:(a) the deduction of the reasonable cost of all deletion from the buildingworks; and/or21OWNERBUILDER
NEW HOME CONSTRUCTION CONTRACT17.717.817.9(b) the addition of the total cost of all extra work, plus the builder’s marginappli
Under the Home Building Act a signed copy of the contract must be given to the owner within 5 working days after the contract is entered into. HOME WARRANTY INSURANCE The contractor must provide the owner with a certificate of home warranty insurance (for work over 20,000) before commencement of work and before demanding or receiving payment.
