Home Building Tips For Builders In NSW
Types of Residential Building Contracts

After your quote or tender has been accepted by a home owner, it is then necessary to select the right type of written contract for that project. Although each project is always different to the last, you can generally group residential building work into 4 or 5 different categories, and then select the appropriate standard contract for that project.

Some contracts are longer and more detailed than others. For more detailed information about residential building contracts, see our Online CPD Course Home Building Contracts in NSW.

TIP: The larger the project, and the more money and risk involved – the more detailed the contract should be.

The main types of standard residential building contracts are as follows:

New Home Construction
This type of contract is for the construction of a brand new home (or a number of new homes or units as part of a development project) under a fixed contract price. If you are to do the work on a ‘do and charge’ or cost-plus basis, you cannot use this type of contract. This type of contract also assumes that the home owner will not be living on the site when the project is being carried out.

Renovations and Additions
This type of contract is for the alteration, addition or renovation of an existing residential building under a fixed contract price. If you are to do the work on a ‘do and charge’ or cost-plus basis, you cannot use this type of contract.
This type of contract also assumes that there is an existing structure on the site, and that the home owner may live on the site when the project is being carried out.

Cost-plus or ‘do and charge’
This type of contract is for ANY type of residential building work, where there is NO FIXED CONTRACT PRICE. As stated above, the home owner will pay the builder the cost of the building works, plus a pre-determined builder’s margin over and above that cost.

Small Construction Works
This type of contract is for all types of residential building work, which:
(a) has a fixed contract price; and
(b) involves ‘smaller scale’ building work (generally up to $50,000).

Minor Construction Works
This type of contract is for all types of residential building work which has a fixed contract price, and involves minor building work that does not exceed $12,000 (where no home warranty insurance is required).

Kitchens and Bathrooms
This type of contract is appropriate where you will manufacture a kitchen and/or bathroom unit and install it for the home owner, all under one contract. You must only use this type of contract if there is a fixed contract price.