What to Look Out for When Signing a Building Contract
Contracts are an essential part of the home building process. And while they’re considered a standard form of paperwork for builders, they can seem quite overwhelming for purchasers.
To help you prepare for your upcoming building journey at Panorama Portarlington, here are four important things to look out for before signing your building contract:
Pay attention to pricing
Be aware that the prices quoted for builds are subject to change. The best way to receive an accurate quote is to take your time and make sure the plans, specifications, materials and finishes you’ve decided upon are exactly what you want. Once you’re satisfied with your home design, ask your preferred builder for an indicative quote. Make sure you wait until your lot gets closer to titling to ask your builder to provide an updated detailed quote.
Understand provisional sums
When negotiating your building contracts, ask your builder if there are any rise and fall clauses, also known as cost escalation clauses or provisional sums, in your contracts. Whilst these clauses or sums aren’t a negative thing, they do give the builder the ability to pass an increase in the cost of materials or work where the actual cost is impossible to know in advance. It’s good to be aware of these clauses/sums and know what materials or work they relate to.
The builder may choose to use these clauses/sums so they can keep contingency in the build price lower and fix as much of the known costs as possible.
Agree on timelines
Check Panorama’s timelines and payment stages in your building contract. If a specific deadline is crucial, make sure you agree on the timelines before you sign with your builder. Be sure to allow some leeway to cover for delays beyond the builder’s control, such as bad weather. And remember, when in doubt, never sign a contract without an agreed timeline.
It’s important to note that building contracts work on milestone-payment terms, meaning payment is made when the builder reaches a certain point in the process.
Time or money spent checking on the quality and progress of your home build is worth every cent. So, if you’re unsure or unfamiliar with the construction process, appoint an independent professional who can inspect the quality of the work and confirm it meets the building codes.
Double check your contracts
Check that every page of your building contract and every blank space has been filled in correctly or lined through as not applicable. Ensure the contract is witnessed properly and initial every single page.
Counter-signing means that both parties have had a meeting at the time of signing. This means lack of understanding or responsibility pleas can’t be used later.
According to the managing director of Home Builders Advantage, Paul Cheverall: “The golden rule with the contract-signing process is check twice, and sign once. If you are unsure of a clause, don’t sign until you are 100 per cent comfortable that you have ensured as much certainty as possible.”
