For most work that is worth more than $5000, both builders and consumers are required to enter a formal written contract. Builders must give building owners a copy of the contract and all relevant documents, such as plans and specifications.

To successfully manage your building contract, you must be actively involved in planning the content of the contract, so that everything you want in the construction of your new home or renovation is included. If details are not included in the contract, the builder is not required to deliver them.

Before signing your domestic building contract, check that it contains all details required by the Act.

Your contract must:

• be written clearly in English
• set out in full all the terms of the contract
• give detailed descriptions of the work to be carried out under the contract
• include plans and specifications containing enough information to obtain a building permit for the work
• state the names and addresses of the parties to the contract
• state the registration number as it appears on the builder's registration certificate
• state the date when the work is to start, or how that date is to be determined
• state that the builder will do everything that is reasonably possible to start work as soon as possible, if the start date is not known
• state a finish date, or if the start date is not known, the number of days that will be required to finish the work once it has started
• state the contract price, or in the case of a cost plus contract, how the amount that the builder is to be paid is to be determined
• state the date the contract is made
• set out details of the insurance required under the Building Act 1993
• give clear advice about the five-day cooling-off period
• have a separate section including definitions of words used in the contract
• show which words used in the contract are included in the list of definitions
• set out warranties implied into the contract
• contain an approved checklist.
  

Types of Contracts
Contracts are prepared by a number of organisations and are available for a range of different types of domestic building work, including works under $5000.

Housing Industry Association (HIA) Contracts

• Plain English for New Homes
• Plain English Domestic Building Contract for Building Works Under $5000
• Plain English Building Contract for Construction of Kit Homes
• Plain English Building Contract for Factory Built Homes
• Victorian New Homes Contract
• Victorian Alterations, Additions & Renovations Contract
• Victorian Kitchen, Bathroom & Laundry Supply and Installation Contract
• Victorian Cost Plus Contract
• Victorian Small Works Contract
  

Master Builders Association of Victoria (MBAV) Contract

• New Homes Contract
• Home Improvement Contract
• Domestic Building Between $5000 and $25,000 Contract
• Australian Building Industry Contract (ABIC) SW1 Simple Works (special conditions are inserted for domestic works in Victoria)

Basic requirements for home building contracts are set out in the Domestic Building Contracts Act 1995. More information on contracts can be obtained from the fact sheet The Domestic Building Contract.

Director-Approved Forms and Notices
The Domestic Building Contracts Act 1995 prescribes specific forms and notices, which are approved by the Director of Consumer Affairs Victoria, to be inserted in domestic building contracts in certain circumstances. Copies of these forms and notices can be found here.

Permits
You need to check with your council or privately registered building surveyor to find out if a building permit is warranted. Your building surveyor will be able to check the Building Regulations Table 1.6 to see if you fall under any exemption. The types of permits are:

Building Permit
A building permit is written approval from a registered building surveyor, and it shows that your plans fit in with the building regulations. In most cases you must have this before you are allowed to build.

Another permit for demolition will be required if you need to demolish an existing home prior to building your new home.

Planning Permit
Planning permits relate to whether your land is zoned for residential or commercial use. A planning permit is not always required, but if you do need one it must be obtained before a building permit can be issued.

Other permits will be needed if Special Building Overlays (SBO) apply to your property, for example Heritage Overlays.

Obtaining Permits
Before building a home or starting a renovation or extension, you need to find out what permits are needed. You may need a planning permit or a building permit, or both. Talk to a private or council building surveyor to find out your council requirements. Every municipality has rules about the size and height of houses, how they can be built and where they can be located on the block.

The Building Code of Australia may also affect the design of works. For work greater than $12,000 your builder will need to provide evidence of building warranty insurance. Even if the work is valued at less than $5000, a building permit is needed for certain types of renovations, such as:

• Restumping or removal of internal, load bearing walls
• Installation of windows where structural alterations are required, for example 'bay' or 'picture' type windows.
  

Who obtains the permit?
You or the builder are responsible for contacting a builder surveyor to obtain permits. This choice will be shown in your building contract. If the builder is obtaining the permit for you, then they must have your written permission.

Do not allow the builder to name you as an owner builder on the permit, unless you have given your permission to do so, and intend to take full legal responsibility for building your home. Builders who are unregistered and uninsured may try to talk you into doing this by telling you it will save you money. Don't be fooled by this! In the long run it could cost you a lot of money.

Where do I obtain a permit?
Building surveyors can be located at your local council or even the councils in the district where you are building. They can also operate privately. You can find private building surveyors listed in the Yellow Pages telephone directory, or by contacting the Australian Institute of Building Surveyors on (03) 9326 7100.

The Building Surveyor
The building surveyor who issued the permit will organise and be responsible for inspection of the site at Base, Frame and Final Stages to ensure building regulations are being met. It is therefore important to establish and maintain contact with the building surveyor throughout the project.

The surveyor can provide explanations and advice on the progress and quality of the building. It is the responsibility of the builder to advise the surveyor when inspections are required.

An independent expert
You may also consider employing your own building experts to advise you, and to inspect the progress of the building work throughout the project.