Owner guide · contract checklist
What to check before signing a contract with a home builder in NSW
For custom homes, knockdown rebuilds and duplexes. Part A covers what NSW law requires of a contract over $20,000. Part B covers practical checks that are not legal requirements but often decide the final cost and programme. Part C explains how to cancel during the cooling-off period.
Short answer
- Work over $5,000 (including GST) needs a written contract. Work over $20,000 needs a fuller contract: the price prominently on the first page, plans and specifications attached, a progress payment schedule, statutory warranties, a cooling-off statement and a 17-item owner checklist.
- The deposit can be no more than 10% of the contract price.
- For work over $20,000, the builder cannot ask for a deposit or any other payment until it has taken out Home Building Compensation (HBC) cover and given you the certificate. You can check the certificate on HBC Check.
- You can cancel by written notice within 5 clear business days of being given a copy of the contract; the builder may keep reasonable expenses already incurred.
- Progress payments must match the work carried out. Variations must be in writing and signed by both parties.
- Statutory warranties run from completion: 6 years for major defects and 2 years for other defects, even if the contract does not mention them.
- The licence name and number must match the party on the contract. A licence held by an individual does not let their company make the contract.
Part A: what NSW requires for a contract over $20,000
Source: NSW Government, Contracts for residential building work (updated 29 April 2026) and the 17-item contract checklist that a contract over $20,000 must contain. If you cannot answer yes to every checklist item, the NSW Government says you may not be ready to sign.
| Check | What the rule says | How to check |
|---|---|---|
| Licence | The contractor holds a current licence that covers the type of work, and the licence name and number match the contract. | Search the builder on NSW Verify. A licence in an individual’s name does not let their company or partnership make the contract. |
| Contract content | Signing date, the parties and licence details, a description of the work with plans and specifications attached, the contract price prominently on the first page with a warning if it may change, a progress payment schedule, statutory warranties, a cooling-off statement, the 17-item checklist, a termination clause and a note on HBC cover. | Go through the draft clause by clause against the 17-item checklist. |
| Consumer Building Guide | The builder must give you the guide before you enter a contract over $5,000; a large contract includes your acknowledgement that you have read it. | Ask for it together with the draft contract. |
| Deposit | The maximum deposit is 10% of the contract price. | Work it out from the price on page 1. |
| HBC insurance | For work over $20,000, no deposit or other payment can be requested until the cover is in place and you have the certificate. | Look up the certificate on HBC Check before you pay anything. |
| Cooling-off | The contract must state the cooling-off period of 5 clear business days after you are given a copy of the contract. | Write down the date you received your copy. See Part C. |
| Signed copy | You are entitled to a copy of the signed contract within 5 days of signing. | Keep it with the plans and specifications it refers to. |
| Progress payments | Payments can be fixed amounts at set stages, payments as work is performed, or a mix; claims for work as performed must be backed by invoices, receipts or other documents. Payments must match the work carried out. | Match each stage to work you can see or have inspected. |
| Variations | Variations must be in writing, signed by both parties and attached to the contract, with the cost and price effect and its calculation shown. | Never agree to a change verbally. |
| Certifier | You choose any registered certifier, and the contractor cannot object. | Checklist item 12. |
| Security of Payment Guide | The contract must include the Security of Payment Guide. | Checklist item 17. |
| Statutory warranties | 6 years for major defects and 2 years for other defects, from completion. They apply even when the contract does not include them. | Keep handover documents and dates. |
Part B: practical checks for custom homes and knockdown rebuilds
These are not legal requirements. They are the points that most often change the price or the programme after signing, so it pays to settle them in writing first.
- Drawings and specification: The contract names the drawing set and revision, the engineering, the energy (BASIX) requirements, the finishes schedule and the approval conditions the price is based on.
- Inclusions and exclusions: There is a written list of what is excluded, such as landscaping, driveways, fencing, window coverings, appliances, a pool, demolition or service connections, and who pays for each.
- Allowances: For each prime cost item and provisional sum, you know the amount, how it was estimated and how a difference is charged. NSW guidance says the builder should allow a price that covers its expected cost for prime cost items such as a stove or special fittings chosen after signing.
- Site costs and risk: You know which site works are fixed and which are allowances: excavation and rock, retaining walls, stormwater, sewer and water connections, tree protection and access. Ask which survey or geotechnical report the price relies on.
- Knockdown rebuild items: Demolition, asbestos removal and clearance, disconnection of electricity, gas, water, sewer and telecommunications, site fencing and neighbour dilapidation reports each have an owner and a price.
- Approvals and fees: It is written who prepares and lodges the CDC or DA, who pays council contributions, the Long Service Levy and water authority fees where they apply, and whether the price covers the conditions of consent.
- Programme and delays: The contract states the start, the construction period, how extensions of time are claimed and what happens if completion is late. NSW Government also publishes guidance on home building delays.
- Payment stages and inspections: Payment stages line up with points where the work can be checked. NSW Government suggests independent progress inspections, at about $250 to $500 each.
- Long-lead and imported items: For windows, stone, joinery and imported products you know who orders them, the lead time, who carries freight and storage risk, and which specifications, compliance documents and warranties come with them.
- Handover: The final payment is tied to defined completion, and the handover pack includes the occupation certificate, compliance certificates, warranties and manuals.
Part C: cancelling during the cooling-off period
- Count 5 clear business days from the day you were given a copy of the contract.
- Give written notice that you are cancelling the contract. Hand it to the licence holder, leave it at the address in the contract, or serve it as the contract allows.
- You can get back money paid under the contract, less the reasonable expenses the contractor has already incurred, such as drafting plans, survey fees or development application fees.
- If the contract says nothing about a cooling-off period, you can cancel within 7 days of becoming aware that it should have.
How to check AUD Build against Part A
- Contracting party: Australian Urban Direct iBuying Pty Ltd, trading as AUD Build, ABN 62 617 159 369.
- Licence: NSW contractor licence 475778C, which you can check on NSW Verify.
- HBC: certificates issued for AUD Build projects can be searched on HBC Check under licence 475778C.
- More public records: licence, HBC certificates and planning approvals.
Before you pay a deposit, ask for the draft contract, the Consumer Building Guide and the HBC certificate for your project. Talk to AUD Build
Questions
What is the maximum deposit for a home building contract in NSW?
10% of the contract price. For work over $20,000 the builder also cannot ask for the deposit until it has given you a Home Building Compensation certificate.
Can a builder take a deposit before HBC insurance is in place?
No, not for work that needs HBC cover (contracts over $20,000). The builder must take out the cover and give you the certificate before asking for a deposit or any other payment. Check it on HBC Check.
How long is the cooling-off period for a building contract in NSW?
5 clear business days after you are given a copy of a contract over $20,000. Cancel by written notice; the builder can keep reasonable expenses already incurred.
How long are statutory warranties on a new home in NSW?
6 years for major defects and 2 years for other defects, counted from completion. They apply even if the contract does not mention them.
Do I need a written contract for smaller jobs?
Yes, for work over $5,000 including GST. Jobs from $5,000 to $20,000 need a small job contract; work over $20,000 needs the fuller contract described in Part A.
Sources
- NSW Government: Contracts for residential building work, updated 29 April 2026.
- NSW Government: Contract checklist (17 items).
- NSW Government: Guide to providing home building contracts, updated 11 June 2026.
- Legal Aid NSW: Builders and contractors.
- NSW Verify licence check and HBC Check.
- Home Building Act 1989 (NSW), the law behind these rules.