Before starting construction or renovations, there are several legal aspects you should take note of. This will protect both you and your builder so that the project runs smoothly.

Signing a written contract

By law, you must have a written contract for work worth more than $10,000. This can include erecting or constructing a home and associated work. Renovations or alterations, demolition of a home or any work associated with land zoned for residential purposes are also covered.

Before you sign a contract, you should check that the builder is registered with the Victorian Building Authority. Ensure your builder is eligible to purchase building insurance and check the terms of the insurance.

Costs associated with building

Your contract should clearly state the following fees:

  • Building fees
  • Lodgement fee
  • Crossing deposit or asset protection fee
  • Inspection fee
  • Government levy charges when the work is $10,000 or more

Liquidated damages

Your contract may also include a liquidated damage clause. This is an estimate of your potential losses if your builder breaches the contract by, for example, failing to complete the job by the agreed upon date. This can cover losses such as rent, travel and other out-of-pocket expenses.

Contracts for home improvements

Even if your improvements will cost less than $10,000, it is recommended you use a contract. This should include:

  • A start and finish date
  • Plans and specifications for the work to be done
  • Make and model of any appliances or fittings and who is responsible for supplying these
  • Labour costs per hour per person
  • Any insurances or warranties
  • Details of what happens if the contract is cancelled

Blaine Hattie is a business lawyer and principal at Sutton Laurence King Lawyers.

Starting a new construction project? To ensure it is legally-sound, contact Sutton Laurence King Lawyers in Victoria today on 03 9070 9810 or email