Building or renovating your home is a significant investment, and protecting yourself legally is crucial. If you want the protections under Schedule 1B of the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act), you must ensure your contract with your builder meets the minimum contract requirements. These requirements apply to both new builds and renovations, and failing to comply could leave you exposed to serious financial and legal risks.
What Are the Minimum Contract Requirements?
At the very least, your contract must be written, dated, and signed by the parties. While this may sound simple, many homeowners unknowingly fall into traps when engaging contractors for smaller projects. For example:
- Adding a roof over a carport after completing your new house.
- Hiring another builder to finish work that your previous builder failed to complete.
These casual agreements often fail to meet the minimum contract requirements, leaving you vulnerable. Under sections 13(5) and 14(10) of Schedule 1B of the QBCC Act, such contracts are unenforceable. This means you lose critical protections, and the consequences can be devastating.
What Happens If the Contracts Are Unenforceable?
An unenforceable contract strips you of the protections under Schedule 1B of the QBCC Act, including:
- Statutory Warranties: You lose the benefit of statutory warranties that safeguard the quality of the work.
- QBCC Home Warranty Insurance: Your insurance under the QBCC home warranty insurance scheme may be void, potentially costing you up to $200,000 in coverage.
The Tribunal has repeatedly confirmed this in decisions such as:
- Cerda v Jacob [2020] QCATA 57.
- Burnell v Jarvis [2024] QCAT 126.
- McGrath v Queensland Building and Construction Commission and Ors [2024] QCAT 393.
These cases highlight the risks homeowners face when contracts fail to meet the minimum requirements. Alarmingly, some builders actively pressure homeowners to bypass these requirements to limit their liability in disputes. While non-compliant contracts can result in penalties for contractors, the lack of an enforceable insurance policy shifts the financial burden onto you, the homeowner.
Imagine losing $200,000 in insurance coverage simply because your contract wasn’t properly documented. Don’t let this happen to you.
What Can You Do to Protect Yourself?
Protecting yourself is straightforward: ensure that any building contract is, at the very least, written, dated, and signed by the parties. But don’t stop there. Under section 14(3) of Schedule 1B of the QBCC Act, your contract should also include:
- Names of the Parties: including the building contractor’s name as it appears on their licence.
- Licence Number: the building contractor’s licence number as it appears on their licence.
- Description of Work: a clear description of the subject work.
- Plans and Specifications: all plans and specifications required for compliance with development approvals or similar authorisations.
- Contract Price: the contract price or the method for calculating it, including the contractor’s reasonable estimate.
- Start Date: a provision stating the date for the start of work or how the date is to be determined.
- Completion Date: a provision stating the date for practical completion or how the date is to be determined.
- Statutory Warranties: a statement of each statutory warranty that applies to the work.
- Withdrawal Notice: a conspicuous notice advising the building owner of their right to withdraw from the contract under Schedule section 35.
These requirements are not just legal formalities—they are your safety net. They ensure you have recourse if something goes wrong and protect your financial investment.
Why Seek Legal Advice?
Given the complexity of these requirements, it is highly recommended that you consult a building and construction lawyer specialising in residential construction before signing a contract or commencing work on your house. A lawyer can ensure your contract complies with the QBCC Act and protects your rights as a homeowner.
Don’t Take Risks With Your Home
Your home is likely one of the biggest investments you’ll ever make. By adhering to these requirements, you can avoid costly mistakes, ensure your rights and protections are upheld, and safeguard your financial future. Don’t let a simple oversight cost you thousands—or even hundreds of thousands—of dollars. Take control and protect yourself today.
Why Choose Material Law?
We offer a 30-minute free consultation with no obligations. This is your opportunity to gain clarity, understand your rights, and take the next steps with confidence. Don’t be caught out by the minimum contract requirements for renovations and new house builds.
Contact us today to book your free consultation and ensure your rights are protected.