Often Builders will arrange a contract meeting where their Clients will be asked to sign their contract and to pay the balance of the deposit. In some cases, Builders provide a sample contract in advance of the meeting. The sample contract contains templated examples of the values, terms and special conditions that will typically be contained in the clients’ true contract when they attend the contract signing meeting.
The Victorian Domestic Building Contracts Act 1995 states that a major domestic building contract must contain a checklist in a form approved by the Office of Fair Trading. Among other points on the checklist, the question is raised as to whether the Owner has had the contract long enough to read and understand it. Ensure that you ask questions or seek advice if you require clarification of any part of the contract that hasn’t been completed in accordance with your specific dealings or agreement with the Builder.
The Act also states that the Builder must obtain information regarding the foundations (foundations data) before entering into the contract. Owners should be wary of Builders that offer a contract to build on land that has not been assessed or is not ready to be assessed and a Provisional Sum allowance for site works is to be determined at a later date.
Although the contract can be signed conditionally, the Builder is not able to receive the balance of the deposit until the Builder has provided the Owner with Domestic Building Insurance certificate. This insurance, also known as Home Warranty Insurance, protects the owner in the event that the Builder becomes insolvent or dies. Do not pay the balance of your deposit to your Builder until you receive confirmation of the insurance. By ensuring this, the Onwers’ payment will be protected in the unlikely event of a claim.