Terms + Conditions
While contract may be confusing to allot of customers, we at “Building Momentum” aim to help you choose the right type of contract that best suits you and your projects. A written contract must be used for all Residential work where the value of the contract (inclusive of labour and materials, even if you are supplying the material) is more than $5,000
As of the 1st February 2012 a new category of written contracts for “small jobs” worth between $1,001- $5,000 has come into effect. A small job contract must be dated and signed on behalf of the parties and contain names of both parties, contrator licence number, description of works and contract price if known.
There are 2 main types of contract used in N.S.W:- “Fixed Price Contracts” and “Cost plus Contracts”. Both contracts have their pros and cons and it’s up to the individual client to choose which best suits their project and their circumstances. Below is a brief explanation of what each Contract is about. Our contracts are supplied by the Master Builders Association of Australia (MBA).
A Fixed Price Contract is a contract that states a lump sum amount it will cost the client to complete their development. Fixed Price contracts are a great option for client’s who know what they want and are more comfortable with the end figure. With this style of contract, it is very important that the clients’ expectations have been well documented and are comprehensive.
Cost plus Contract:
A Cost plus Contract is a more flexible option for the client. It’s is best suited to client’s who want to be involved in the total workings of their project. Under a cost plus contract, the client is charged for the actual cost of construction ‘PLUS’ profit, which is normally expressed as a percentage of the cost of construction.
Under a cost plus contract, the owner will only be charged the actual cost of materials. This may in fact may save the client money as there may be a significant difference between actual cost incurred and speculative contingencies included in the fixed price quote.
When a client has chosen which contract to use, you will be provided with a duplicate hard copy of the signed contract prior to commencement of any building work as well as a copy of the “Consumer Building Guide” issued by the “NSW Office of Fair Trading.” This is a handy booklet talking about what to expect during your building project.
Upon a Written Contract being entered into together with any variation documents and conditions, a payment plan is taken into affect. An initial deposit is to be given to the Builder prior to works commencing. The rate according to the NSW Office of Fair Trading is 10% for works under a total of $20,000.00 and 5% for works over $20,000.00.
Each invoice will be given to the client every 7 days from the first day of commencement of works and thereafter. Payment will be made within 5 day of receiving each invoice from the builder. Payment via direct deposit and cheques is to be cleared within 5 days from the date of invoice as per stated in your contact. The finial invoice is payable on completion of all works.
All payments are subject to the Building and Construction Industry Security of Payments Act 1999 NSW.