Most people read two things in a building contract: the price and the finish date. Everything else is where the arguments live. Queensland law sets a lot of those clauses for you, and once you know why each one is there, the contract reads a lot less like a trap.
What must be in the contract
A contract over $3,300 is a regulated contract. Under $20,000 it's level 1; at $20,000 or more it's level 2, which is where every granny flat and extension sits. A level 2 contract must be in writing, dated and signed by both sides, and it must contain:
- The names of the parties, with the builder's name exactly as it appears on their licence.
- The builder's licence number.
- A description of the work, and the plans and specifications, including any needed to comply with the approvals.
- The contract price, or the method for working it out, including the builder's reasonable estimate.
- The start date on site and the date for practical completion, or how each will be set.
- A statement of the statutory warranties.
- A conspicuous notice about your right to withdraw in the cooling-off period.
If the price is fixed, it goes in a prominent spot on the first page of the schedule. If it can change, there must be a warning and a short explanation right there too. The contract can't name anyone as the builder except the real builder. The builder must give you a signed copy, with plans and specifications, within 5 business days. For level 2 work you also get the QBCC Consumer Building Guide.
From our side of the table: an unsigned or verbal contract has no effect, so a builder who starts on a handshake is working without the protection the paperwork gives both of you. The warranties are written in by law whether the contract mentions them or not: good and suitable materials, new unless stated, work that complies with the law, care and skill, and a home fit to live in. Breaches can be chased for 6 years if structural and 1 year otherwise, counted from completion.
Deposit and cooling-off
| Contract price | Most the builder can take before work starts on site |
|---|---|
| Over $3,300, under $20,000 | 10% |
| $20,000 or more | 5% |
| Off-site work more than 50% of the price | 20% |
The deposit includes anything paid before work starts on site, including the home warranty insurance premium. The 20% rule exists because a factory spends real money on your home long before anyone turns up with a truck. That's why a modular contract can lawfully ask for more up front than a stick build. Pay more than the cap and your home warranty claim can be cut back to the capped amount.
Cooling-off is 5 business days, starting the day after you receive a copy of the signed contract. For level 2 work, if the Consumer Building Guide arrives later, the 5 days run from when you get it. To pull out, give the builder a signed written notice saying you are withdrawing under section 35 of Schedule 1B. QBCC says the builder can usually keep $100 plus reasonable out-of-pocket costs. You lose the right if you had formal legal advice from a practising lawyer before signing, or a substantially similar contract with the same builder for the same site.
Progress payments tied to work done
After the deposit, a builder can only claim an amount that is directly related to progress on site and no more than the value of the work it covers. QBCC's example: no claim taking you past 50% of the price, deposit included, until half the work on site is done.
Why we like this rule: it keeps your money and the work in step. If a builder goes broke, you've only paid for what's standing. It also means the builder carries the cash between claims, which is why we price a modular install with a clear stage for crane day. Never pay ahead of the schedule. QBCC warns that paying early or paying more than the contract says reduces your home warranty protection.
Variations and extensions of time
A variation is any change to the work or the price after signing. The builder must give you the variation in writing before the work starts, and within 5 business days of you both agreeing to it. It must describe the change, the date you asked for it, any delay it causes, and the change in price and when it's paid. The builder can't start the varied work until you agree in writing, and can't ask for the extra money before that work starts.
An extension of time can only be claimed when the delay wasn't reasonably foreseeable and was beyond the builder's control, or you caused it, or it came from a written variation. The claim has to be in writing within 10 business days of the builder becoming aware of the cause and extent of the delay, and you must approve it in writing.
From our side: variations and extension claims are where friendships with builders end. Written variations protect you from surprise bills and protect us from doing extra work nobody pays for. If your builder says they'll sort the extras out at the end, they're asking for an argument.
Practical completion and the defects period
Practical completion is the day the work is finished to the contract, plans, specifications and the law, with only minor defects or omissions that won't unreasonably affect living there. If you say there are minor defects, the builder gives you a defects document listing them. QBCC says the builder should give you at least five days' written notice of the practical completion inspection.
Walk the job with the contract and plans in hand and list everything. QBCC says a builder must fix defects noticed at handover or within 12 months of the work finishing. Your home warranty clock is shorter: a non-structural defect must be noticed within 6 months and claimed within 7 months of the work being substantially complete. Put every defect in writing to the builder the day you find it.
Disputes go to QBCC first
Under section 77 of the QBCC Act you can't take a building dispute to QCAT until you've been through QBCC's process to try to resolve it. Step one is a written notice to your builder listing every defective or unfinished item, with a timeframe to fix them. If that fails, lodge with QBCC. QBCC will try to get you and the builder to an agreement, and if it can't, it gives you a letter so QCAT will accept your application.
If it does go to QCAT, that's when a lawyer who practises building and construction law earns their fee. Bring the contract, every variation, every written notice and photos with dates.
What we'd check before you sign
- The name and licence number match the QBCC register.
- The price is on the first page, and any clause that can change it has a warning next to it.
- The deposit is inside the cap for your contract.
- The payment stages line up with real progress on your block.
- There's a start date and a practical completion date, or a clear way to set them.
- Provisional sums and PC items look realistic for your site, not placeholders.
- Owner builder or licensed builder for a modular granny flat
- QBCC home warranty insurance: what it covers and who pays
- How to check a builder before you sign
- Modular and kit home installs
- Get a quote
- Queensland Building and Construction Commission Act 1991, schedule 1B and s 77
- Queensland Building and Construction Commission Regulation 2018, s 45 (level 2 amount)
- QBCC: Deposits and progress payments
- QBCC: Cooling-off period
- QBCC: Practical completion inspection
- QBCC: Time limits for cover and claims
- QBCC: Help with defective work
- QBCC: Queensland Home Warranty Scheme product disclosure