By Nicholas Witherow and Aisha Dennes.
Partner and Head of Litigation Nicholas Witherow and Associate Aisha Dennes combine deep experience in both litigation and property and commercial transactions. They guide clients through all stages of a building project, with strategic approaches to avoid or minimise disputes as well as tactics to ensure commercial resolutions.
For most of us, building our dream home is equal parts exciting and daunting. Building and renovating are complex undertakings with many moving parts. Experienced builders know to plan for the unexpected, but if you are building for the first time, it’s hard to know what questions to ask. With experienced advice, good planning and clear communication, you can be better equipped to resolve any building issues you encounter and avoid protracted disputes.
Set the foundations for good communication
In our experience, a successful build relies on trust and good communication between owner and builder. That starts with making sure you engage a reputable licensed builder. Check licenses and references. Ask as many questions as you need to be confident your builder has experience with the type of build you are undertaking. Make sure you also talk to the builder about their subcontractors and their experience.
The law in Victoria provides certain protections for domestic building owners. These include requiring a written ‘major domestic building contract’ for domestic building work worth more than $10,000. Consumer Affairs Victoria also provides resources, including a building contracts checklist to help building owners understand key issues that a contract should include. The government has announced changes to update and simplify the law. The changes to Victoria’s Domestic Building Contracts Act are due to commence in December 2026.
Building contracts may be based on a standard or pro forma contract, but the details of the build still need to be negotiated and agreed. In particular, the special conditions and schedules will include key details of the build. These need to be well-drafted to cover your build.
Do not hesitate to seek legal advice on your contract. It is in both parties’ interests that the contract accurately reflects their agreement and expectations. When we advise on a building contract, our approach is to encourage communication between owner and builder and identify any issues that need to be clarified between them. Good communication at this stage is an important indicator that you’ll be able to discuss and resolve issues and avoid disputes as the build progresses.
Document everything before you build
Even though builds can throw up unexpected elements, avoid leaving key details to be worked out along the way. Ideally everything should be specified in the plans and specifications.
In our experience, the costs to vary a plan after building has started are always much higher than at the beginning. Further, lack of detail at the beginning can lead to delay, or worse, protracted disputes, as it may be unclear whether an issue stems from the design, drafting, or construction.
Make sure the plans include the key ‘liveability’ factors such as lighting and power points, or which way doors will open. Disputes can arise if key structural issues are not considered early, such as how parts of the building will connect or additions connect to existing structures. This is an important issue to discuss with your builder.
Of course, if plans do need to be adjusted to deal with issues that come up during the build, always make sure to agree to the resolution of the issue. Make sure the variations are documented in writing and as required by the terms of the contract.
Checking the build is what you planned
Discovering when the building is completed that it doesn’t match the plans may be devastating, but hard to address. Once building gets underway, you can expect to have periodic meetings and site visits with the builder. That is a great way to check on progress and manage issues as they come up. But also consider how you will be confident that what’s being built matches the plans.
Be aware that the building surveyor will sign off against compliance requirements, not against plans. That is, they will check foundations are the right depth or studs the right strength, for example. However, they are not checking design issues such as whether a doorway is in the right place compared with the plans.
If you are not sure you can read the plans well enough yourself, you may need to engage an expert. This could be the architect if there is one on the build. Or you can engage an independent building inspector to keep the build on track and spot potential non-compliance early. They should be able to flag any issues as they come up and will generally inspect the build at the time progress payment milestones are reached. We can recommend these professionals if appropriate.
Make sure you are confident to progress payments
The costs of the build can be another fraught issue for both owners and builders.
By law, builders in Victoria are liable for structural defects for up to 10 years after the occupancy permit is issued. One protection for owners is the legal requirement that builders must take out domestic building insurance for work over $16,000. You might also see this referred to as builders warranty insurance. This insurance is subject to limitations, but it does provide owners with an insurance of last resort. The builder must have this in place before they are entitled to payment, so always check insurance details before you pay any funds out.
The law sets out the schedule of progress payments to be included in building contracts. This protects both owners and builders, as the builder gets funds to purchase materials and pay other trades, while the owner can see progress before they part with the funds.
If you are borrowing funds for the build, it’s important to consider the timing of progress payments. The bank may require its own inspection before it will release the next tranche of funds. This may take time, so you want to make sure the contract allows enough time for their inspection before a progress payment is due.
Options for resolution
If a building project does go wrong, there are a range of legal options open to those involved in a building dispute. We can support you throughout the process.
That said, building disputes can be complex as they involve so many people and moving parts, and liability can be complex to apportion. A dispute affecting our home is something we’d all rather avoid. It may not be possible to foresee all the variables. But experienced advice, strong documentation and good communication will give your build the best chance of living up to your dreams.
Get P&B Law's advice to avoid or resolve building and construction disputes.
Domestic building disputes are likely to involve significant personal and financial considerations, as well as complex liability questions. P&B Law’s experienced team guides clients through every stage, with empathy and practical strategies to achieve the resolution that’s right for them. Contact us today for advice on avoiding or resolving a building dispute.
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