Why you should never build without a contract

Why you should never build without a contract

For the last ten years I have been advising my clients against working with a builder without a contract. Even if it’s cheaper. I have seen and heard many disaster stories. Most recently my sister has had bad luck with the builder, the quality of the finish isn’t there and there are many mistakes. But she didn’t have a contract, making fixing things and restitution difficult. So, I want to advise why you should never build without a contract.

Verbal versus writing

Good communication skills are key in selecting the right builder or trade for your project. While you may think you’re clear about what you want, having it in writing makes it even clearer.

They say talk is cheap and the reason for this is that talk is open to interpretation. You and your builder are discussing your project but with very different perspectives and understandings.

The words used by your builder may have a different meaning to the words you use. For example, you might assume that the builder will supply tiles but usually builders factor in an allowance for budget tiles and you may want to spend more on tiles.

This discrepancy will only come to light when the time comes to select and buy tiles and you want something that is $120 p/m2 and your builder has only allowed tiles worth $30 p/m2.

Having this detail documented in a contract ensures you and your builder are on the same page and there are no nasty surprises.

Value of a contract

The value of a contract is many and varied. The contract should outline the scope of works, the inclusions, exclusions, warranties, registrations, timings, reimbursement if the build goes over, contingencies and many other micro and macro details about your project.

It’s a hefty important document and I often advise my clients to seek legal advice in reading and interpreting a builder’s contract to ensure they understand what they’re getting and what they’re not getting and what safety net they have.

The cheapest builder is not the best        

All renovation work is not created equal. It might be fine to not have a contract for small projects around the house. This is not my advice, but I also understand that not all work is large in scope.

My trades are not the cheapest. I’m open and honest with my clients about this. But and this is a big but, they are insured, registered, good communicators, have a solutions mindset and answer the phone when I call.

I think you should engage a professional trade with a contract for any work over $5,000. If things go wrong and you’re spending less than $5,000 you might feel ok about cutting your losses.

My sister spent $150,000 on a builder she trusted, a friend, and although I advised her to get more than one quote, and get a contract, she didn’t. Now she has no recourse for a resolution. It’s an expensive lesson but one you don’t need to make.

For most people your home is your most valuable asset that’s why you should not build without a contract to protect your asset and your peace of mind to ensure you get value for money.


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