Getting out of a building contract - checklist

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Ending your contract during the cooling-off period 

  • Your contract must include notice of your right to cool off

You can withdraw from a contract without penalty for up to five days after signing the contract – being the nominated cooling off period.

If you withdraw from the contract during the cooling-off period, you are not liable to the builder in any way – for example, for financial losses. You may be liable for incidental expenses of the builder.

You have five business days after receiving a signed copy of your major domestic building contract to withdraw without penalty. This is your ‘cooling-off period’.

Your cooling-off period starts from the date you received the copy signed by the builder, regardless of when you signed the contract.

By law, your contract must advise of a five-day cooling-off period. If it did not, you may withdraw from the contract within seven days of becoming aware it was not included (follow the above steps).

You are entitled to a refund of your deposit, less $100 and any out-of-pocket expenses the builder incurred before the contract was withdrawn, which you approved.

If you withdraw from the contract during the cooling-off period, you are not liable to the builder in any way – for example, for financial losses.

When you are not entitled to cooling off

You do not get a cooling-off period if you:

  • previously entered into a major domestic building contract with the builder on the same terms for the same home or land, and cancelled the contract during the cooling-off period
  • engaged a lawyer to review the contract before you signed. However, a building lawyer can help you understand and negotiate your contract.

What to do when you want to cool off

You must notify your builder in writing if you decide to withdraw from the contract. The cooling-off period notice must be included with the contract. You can also use the cooling-off notice available on our website.

To ensure it is legally binding, deliver the completed notice to the builder within five business days by:

  • giving it to the builder in person
  • leaving it at the builder’s address
  • sending it to the builder by registered post
  • serving it on the builder in the way stated in your contract.

Dispute resolution after the cooling-off period

For information about what to do if you have a dispute or issue after the cooling-off period, see our Building disputes, defects and delays page.

If completion time or cost blows out for unforeseen reasons

You may end a major domestic building contract under section 41 of the Domestic Building Contracts Act 1995 (the Act) if:

  • either the contract price rises by 15% or more after entering into the contract, or the contract is not completed within 1.5 times the period it was due for completion, and
  • the price or time increase was due to something unforeseeable by the builder when entering into the contract.

In calculating the price or time increase, you cannot include:

  • a prime cost item or provisional sum, or
  • variations you requested or made to the building plans or specifications.

How to end the contract

You must give the builder a signed notice stating that the contract is being ended under section 41 of the Act. The notice must also give details of why the contract is being ended.
If you end the contract in this way, you must still pay the builder a reasonable price for work completed before the contract ends. A builder may not recover more than they would have under the contract.