When you need a contract
Whether you're building a house for a homeowner, or working in the commercial sector on highrises, you need a contract between yourself and your client or subcontractor. This includes head contracts, subcontracts and sub-subcontracts (i.e. contracts between subcontractors).
If any of your jobs involve domestic building work priced at over $3,300, you need to use a written contract. If the work is priced at $20,000 or more, you must also ensure your client is given a signed copy of a QBCC-approved Consumer Building Guide.
Launch of updated Consumer Building Guide (CBG) for all domestic contracts priced at $20,000 or more
We have launched an updated version of the Consumer Building Guide, the consumer information document for homeowners about key building issues, and how best to avoid disputes and common pitfalls. The updated Guide, labelled ‘Version 3 – Effective from December 2020’, is now available free to download. You must give your client a QBCC Consumer Building Guide before the client signs a contract for any domestic building work priced at $20,000 or more (i.e. level 2 contracts). There is a transition period during which you may still use the original, undated version of the CBG or Version 2 dated January 2020 with your contract. From 1 February 2022, however, Version 3 will be the only acceptable document.
What is domestic building work?
Examples of domestic building work include:
- building a new detached dwelling (including a duplex)
- building a structure associated with a home such as a shed, garage, carport, retaining structure, driveway, fence, workshop, swimming pool or spa
- removing or re-siting a dwelling intended to be used as a residence
- renovating, extending, altering, improving (including painting and installing services) or repairing a home, duplex or unit
- refitting a kitchen or bathroom, and
- landscaping, paving, site work, etc.
Retention monies in contracts
Retention monies in construction contracts will no longer be limited to the usual five per cent of the contract price, if a ‘special-purpose vehicle’ is one of the contracted parties.
A special-purpose vehicle is an entity established to carry out a public-private partnership, and is declared by the Queensland Treasurer by gazette notice.
These recent amendments to the QBCC Act don’t affect standard subcontracting arrangements between principal contractors and subcontractors, in which retention monies under subcontracts remain limited to 5 per cent of the contract price during construction and 2.5 per cent after practical completion. The parties cannot contract out of these provisions.
Which contract to use?
You have a few choices. You can use one of our contracts, which covers most situations and has the added benefit of being compliant with the legislation. Alternatively, you can use a contract developed by an industry association, or develop your own but you must check that it complies with current laws. If you opt to use an interstate contract, be aware that they don’t usually meet the requirements of Queensland legislation.
A warning about using your own contract
If you want to use your own written agreement, it’s essential you get legal advice first. You risk prosecution, fines, or financial loss if you go ahead without making sure that it complies with the Queensland legislation.
Before you sign a contract
Read our helpful guide Domestic Building Contracts – General information for owners and contractors (PDF). It contains general information about domestic building contracts and the relevant Queensland legislation.
QBCC contracts associated with domestic building work
- New Home Construction Contract (PDF) - for the construction of an entire home
- Level 1 - Renovation, Extension and Repair Contract (PDF)- for renovations, extensions and routine repairs on existing homes for contracts $3,301 to $19,999
- Level 2 - Renovation, Extension and Repair Contract (PDF) - for renovations, extensions and routine repairs on existing homes for contracts $20,000 and over
- Natural Disaster Repairs Contract (PDF) - designed to help you organise repairs to a home, duplex or home unit after a natural disaster
- Consumer Building Guide (PDF) - must be given to a home owner before they sign any domestic building contract priced at $20,000 or more
- Demolition Contract (PDF) - a simple two-page contract for recording the demoltion of a domestic premises
- Small Building Projects Contract (PDF) - a simple two-page contract for domestic building work priced up to $3,300
As a consequence of the Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Act 2017 (Cth) ("the Act") which came into effect as of 1 July, 2018, QBCC has amended all of its domestic building contracts, being the New Home Construction Contract, the Level 1 & Level 2 Renovation, Extension & Repair Contracts and the Natural Disaster Repairs Contract to better address a party's right to terminate the contract for reasons related to the insolvency of the other party to the contract.
As the Act applies to all contracts entered after 1 July, 2018 QBCC is concerned to ensure any person entering a contract after that date uses the updated version of the Contract, to avoid certain existing clauses being deemed to be unenforceable by the Act. If you have a copy of a QBCC or other domestic building contract dated prior to 1 July, 2018, you should discard that contract and replace it with a more recent version which reflects the changes introduced by the legislation mentioned above.
Consumers are reminded that the termination of any contract is a significant step which should not be taken without prior legal advice from an experienced lawyer.