Signing a residential building contract

This page has information about when you must have a residential building contract in the Northern Territory (NT) and what it must include.

Once you find a builder that you trust, and are satisfied with their quote, you must sign the contract before work begins. 

When you need a residential building contract

Check if you need a residential building contract by reviewing the list of residential work that requires permits.

While you only need a building contract under NT law for prescribed residential building work, written contracts for all your building work may be useful if you need to review your builder’s work later on.

What your residential contract must include

A residential building contract for prescribed works must meet specific requirements under the Building Act.

The contract must specify all of the following:

  • the building contractor’s details and registration number
  • the extent of the work to be undertaken
  • the total contracted price
  • the schedule of progress payments, either the standard schedule or an alternative schedule agreed between you and the builder and documented as a formal agreement on the appropriate forms - see more information below
  • a provision about dispute resolution
  • the consumer guarantees required by the Building Act
  • the applicable building standards of work - if higher than the National Construction Code and Australian Standards.

A standard schedule of progress payments

A standard schedule for progress payments for a residential building contract should look like the following:

  • deposit before commencement - no more than 5% of the total contracted price
  • on completion of base stage - no more than 10% of the total contracted price
  • on completion of frame stage - no more than 20% of the total contracted price
  • on completion of enclosed stage - no more than 25% of the total contracted price
  • on completion of fixing stage - no more than 30% of the total contracted price
  • at practical completion - no more than 7% of the total contracted price
  • final completion - at least 3% of the total contracted price after issue of  occupancy certification, or a builder’s declaration in a Tier 2 area.

Carefully consider whether your project requires an alternative payment schedule before agreeing on any changes with your building contractor.

Before you sign a contract

Your residential building contract is a binding legal document. It details how you and your builder will share rights and responsibilities for the project.

Before you sign the contract, you should understand the construction process for your project, the steps along the way, the variables that can occur and how to resolve issues if they arise.

You need to be aware of what is in your contract. 

If there are any changes or variations to the project during construction, make sure these are in writing and the contract is changed as needed.

If you are unsure about a contract, get legal advice before you sign it.

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Last updated: 27 June 2017