The Department of Local Government, Industry Regulation and Safety, Building and Energy division (LGIRS) can provide further information and assistance to homeowners about your rights and responsibilities under WA building laws.
Australian Consumer Law contracts – ACCC information is avaiable at: https://www.accc.gov.au/consumers/buying-products-and-services/contracts
This page includes a video that details the building process and is available with translated captions.
Your protections
Notice for the homeowner
Home-building work includes building a new home, renovating, repairing or altering an existing home or placing a new home on a lot of land. It also includes associated work such as installing a swimming pool, cabinetry or tiling, constructing a garage, shed or pergola, or landscaping.
Your rights and protections for contracts involving this type of work, where the contract is for a fixed-cost between $7,500 and $500,000, are covered by the Home Building Contracts Act 1991 (the Act), and they apply whether or not your builder is a registered builder. Before you sign a contract, your builder must provide you with a copy of the ‘Notice for the homeowner’, which outlines their legal requirements and obligations and protections afforded to you as the owner.
Copies of the Home Building Contracts Act 1991 and the Home Building Contracts Regulations 1992 are available on the Parliamentary Counsel's Office website.
Home indemnity insurance
Home indemnity insurance (HII) is required for all building work requiring a building permit and valued at more than $20,000. HII is an important safeguard for homeowners and is there to help in the event of the death, disappearance or insolvency of your builder.
HII can cover damages, such as the loss of a deposit (up to $40,000) and incomplete or defective building work (up to $200,000).
Your builder must give you a copy of your HII certificate. You shouldn’t make any payments to your builder until HII is in place. Your policy can be checked using the online register maintained by QBE at https://www.qbe.com/au/builders-warranty/certificate-register
It’s important to note that a preparation of plans agreement, or PPA, doesn’t form part of a home building work contract so it isn’t covered under a HII policy.
Home indemnity insurance fact sheet
Building challenges
Deposits, progress payments and price increases
Prior to work commencing your builder will likely ask you for an initial deposit. Once work gets underway, progress payments will be requested for stages of work as they are completed. The Act provides for limits and conditions on these payments and it’s important you understand how they work, as they can affect your home indemnity insurance.
The maximum deposit that your builder or tradesperson can require before they start work is 6.5 per cent of the contract price. The Act does not apply to contracts that are valued below $7,500 or over $500,000 and therefore there is no limit to the amount of deposit a builder may request for contracts with values below or over these amounts. When paying deposits on contracts valued over $500,000 it is important to note that the HII coverage for loss of deposits is capped at $40,000.
There is a limited exception to the rule regarding deposits that applies for off-site cabinetry work, where the value of that work represents more than 50 per cent of the contract value. In this limited circumstance, a deposit of up to 20 per cent can be requested by the builder.
Once work has started, you should only make progress payments for work that has actually been done or for materials have already been supplied. For example, your builder can’t ask for a progress payment for the purchase and delivery of bricks until the bricks have actually been delivered to the site. With the exception of the deposit, upfront payments to your contract are not allowed and, if made, can affect any claim you may have under your home indemnity insurance policy.
There are limited circumstances when a builder may pass on price increases during the term of a contract. Once such circumstance is if there is a delay experienced in the obtaining of a building permit and subsequent commencement of work for which the builder is not to blame. In such cases, the builder may pass on a price increase to an owner under the contract for any addition costs that may be incurred as a result of that delay.
If you believe a price increase is unjustified or excessive, you can lodge a complaint with LGIRS.
Building contracts and progress payments
Extensions of time
Due to factors outside the control of the builder, they may issue a variation to the contract extending the time for completion. Common examples of when this may occur can be due to inclement weather or when materials specified in your contract may be unavailable and they may be having trouble sourcing an acceptable alternative.
If you’re asked for an extension of time, make sure you review your contract, ask your builder to outline the reasons for the request and to confirm the relevant related clauses in your contract.
Termination of the contract
If you are thinking about terminating your contract, it’s important to understand your obligations, as well as your rights, to avoid potentially costly consequences. If you terminate your contract, you may be liable to pay the builder damages and expenses including any loss of profit.
If you are unsure of your rights and of possible consequences from terminating a contract, you should seek independent advice.
A guide on price increases to home building work contracts
Dispute resolution process
An owner or builder under a contract, who believe there has been, a breach of the contract, or a provision of the Act, may lodge a home building work contract complaint with LGIRS within three years of the contract date, or the cause of action arising. LGIRS remains impartial when dealing with complaints, with decisions being made based on the individual merits of each complaint.
Tips for each stage of the building process
Topics for each stage of the building process
- Choosing a block of land and a builder
- Considering design and plans
- Signing the contract
- Before construction starts
- During construction
- Handover and moving in
Video with translated captions
The video is available with translated captions in the following 10 languages.
- Chinese Simplified (Mandarin)
- Vietnamese
- Korean
- Arabic
- Chinese Traditional (Cantonese)
- Hazaragi
- Karen
- Thai
- Punjabi
- Burmese
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