Before you sign: why a lawyer should review your domestic building contract

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It doesn’t matter if you’re building your first home or developing a strata complex – domestic building contracts are a must. After all, building a property is exciting but also very stressful, and you want to ensure your development is covered by legal documentation.

The development process can be fraught with challenges and hurdles. What’s more, developments include a huge array of documents including architectural plans, council permits and engineering reports before ground can even be broken.

Glueing the whole development together is a myriad of domestic building contracts, written up to protect the rights of the property owner and all parties involved in completing the development.

The best domestic building lawyers Melbourne has available can clear up further issues for you, but here is a brief rundown of why domestic building contracts are a must for property developers and all other parties involved:

Victoria’s construction industry is thoroughly regulated

This is a good thing. It means that there is greater protection for all parties involved in the building process. Victoria’s principle legislation regarding construction is the Domestic Building Contracts Act 1995 (Vic.). This legislation covers contracts as well as builder insurance requirements and dispute resolution.

Both the property owner and development parties must be aware of the Building Act 1993 (Vic.), the National Construction Code, the Building and Construction Industry Security of Payment Act 2002 (Vic.) as well as other legislation regarding these fields. There are thousands of pages of legislation regarding these acts and this is why it’s always good to have a construction lawyer in your corner.

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You have to thoroughly review the contract

Despite their importance, many people choose to overlook thoroughly reviewing their domestic building contracts. This is often because they think it is a generic contract which will protect their investment regardless of any situations that arise.

But this isn’t so, as construction law is a complex and, at times, convoluted law field, that often requires professionals to navigate its complexities. Developing a home is one of the biggest financial investments a person will ever make, and the complexity of building law is something that shouldn’t be glossed over. This is why property developers should always have a professional construction lawyer thoroughly review their specific contract.

Reasons to have a lawyer review your building contract

When a property developer doesn’t properly review their contract all kinds of problems can occur, including:

Extra fees at different stages

Outrageous costs for various construction stages, leaving builders with too much money upfront but less funding to adequately complete the project.

Low liquidated damages

Insufficient liquidated damages, which leaves development parties without funds if there are undue delays or a builder breach.

High interest rates

Outrageously high interest rates for contract invoices that are yet to be paid.

No understanding of builder’s financial situation

Not reviewing the builder’s financial position or solvency at the project’s commencement (this can cause cash flow problems from the very beginning).

Lack of funding

Lack of funding withheld throughout the defects liability stage (this often leads to the builder failing to complex the job properly.

Fittings descriptions

Lack of fittings description or documentation which results in hidden fees.

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Extra fees on variations

Extra costs for builder variations that seem easy but were beyond scope.

For these reasons a property developer should never overlook thoroughly reviewing their building contract. An experienced construction lawyer will be able to thoroughly evaluate your contract and ensure that the building company is adhering to the guidelines set out in Victoria’s thorough building legislation.

This is why a construction lawyer should always thoroughly review your building contract.