Written By Annelyse Stead | Australian Home Building & Renovation Contract Specialist | M. Construction Law | B.Construction Management

Every homeowner I meet starts their building journey with the same optimism. They've chosen their builder, signed the contract, and can already picture themselves in their dream home.

But here's what most don't realise: the things that derail a build are usually planted long before construction begins – hidden in contracts that few people take the time to learn about.

Here’s my top 5 hitlist of common issues that can come up during new home building projects

At the beginning of every project, everyone – the builder, the client, and the designer – shares the same goal: to see the project through to success.

Yet I've watched too many builds transform from exciting projects into drawn-out nightmares. Delays stretch from weeks to months. And homeowners find themselves powerless because they didn't know what protection they were entitled to.

The difference between a smooth build and difficult one? Understanding five critical contract issues before you sign.

The 5 contract issues that derail Australian Home Builds (and how to prevent them)

1. Unclear Contract Inclusions

Last year, I consulted with a couple in Melbourne who thought their $450,000 contract covered everything. It didn't. They ended up paying an additional $23,000 for "extras" that should have been included from day one.

Here's what commonly gets missed:

Authority Costs: Building permits, inspections, and council fees can add $3,000-$8,000. Your contract should specify who pays – and it should be the builder.
Service Connection Costs: Connecting gas, water, and electricity often costs $5,000-$15,000. If your contract is silent on this, you're likely paying.
Landscaping & External Finishes: That rendered facade and landscaped garden in your plans? Check if it's actually in your contract scope, or you'll be writing another cheque at the end.
Internal Finishes: The beautiful stone benchtops in the display home might not be what's specified in your contract. I've seen clients expecting Caesarstone receive laminate instead.

The fix: Before signing, request a complete inclusions list. Every single item should be documented with brand names and model numbers where applicable. If it's not in writing, it's not included.

2. Project Delays

According to the Australian Bureau of Statistics, 68% of Australian home builds experience delays beyond the contracted completion date. Most homeowners absorb these delays because they don't understand their rights.

Here's what one of my clients experienced: Their builder was 4 months late completing their home. They were paying $2,400/month in rental costs that should have ended. That's $9,600 in losses – but their contract entitled them to liquidated damages that covered every dollar.

Your contract should clearly outline:

Specific start and completion dates (not vague "approximately" language)
What constitutes a valid delay claim by the builder
The liquidated damages rate you're entitled to
The process for claiming these damages

Builders can claim legitimate extensions for weather, client-requested changes, or supply issues – but only if they follow the proper notification process outlined in your contract.

The fix: Understand your delay clause before signing. If the liquidated damages rate is too low or there's no rate specified, negotiate this before you're locked in.

3. Cost Blowouts

A fixed-price building contract means exactly that – the price is fixed. Yet I regularly hear from homeowners hit with unexpected cost increases.

"Material costs have gone up," their builder says. "You'll need to pay the difference."

Under Australian building legislation in most states, once you've signed a fixed-price contract, the builder bears the risk of cost increases. The only legitimate reasons for price changes are:

Client-requested variations (changes you ask for)
Prime cost (PC) and provisional sum adjustments (and these should be clearly identified in your contract)
Unforeseen site conditions that couldn't reasonably be anticipated

I worked with a client whose builder tried to add $18,000 for "increased material costs." We reviewed their Victorian building contract, cited the relevant section, and the builder withdrew the claim within 48 hours.

The fix: Your contract should define the total contract price and specify exactly when variations are permitted. If your builder mentions price increases for standard materials, cite your contract and stand firm.

4. Supply Chain Disruptions

Post-COVID supply chain issues have added an average of 8-12 weeks to Australian building projects, according to Australian Bureau of Statistics data from 2024.

But here's what most homeowners don't realise: Not all supply delays entitle your builder to a time extension.

When a builder in Brisbane told my client that window delays would push their completion back 3 months, we investigated. The builder had ordered the windows 2 weeks before installation – not the 12 weeks the manufacturer required. This wasn't a supply chain issue; it was poor planning.

The fix: Ask your builder before signing: "What are the long-lead items for this build, and when will they be ordered?" Document their response. If delays occur later, you'll have evidence of whether proper planning occurred.

5. Payments for Unfinished Work

Building contracts typically include progress payments – you pay at certain milestones throughout the build. But I've seen too many homeowners pay for work that isn't actually complete.

Here's an example: A client paid the "lock-up" stage payment of $95,000. Two weeks later, they visited the site and discovered:

Windows weren't installed (just openings)
External doors were temporary, not the specified product
Roof tiles were only 60% complete

They'd paid for 100% of a stage that was maybe 70% complete. When issues arose later, they had zero leverage because they'd already paid.

Australian building legislation protects you here. You only need to pay for work that's been completed. If a stage is 80% done, you should pay 80% of that stage payment – not the full amount.

The fix: Before making any progress payment, inspect the work yourself or hire an independent inspector. Document what's incomplete. If the stage isn't fully complete, calculate the percentage that's done and pay accordingly. Keep detailed records of what you've paid versus what's been completed.

Start your home-building journey with confidence, master your building contract and stay in control through your entire project.

The real cost of not learning about your Building Contract

I recently spoke with a homeowner who "didn't want to make waves" by questioning their contract. They:

Paid an extra $28,000 in costs that should have been included
Absorbed $12,000 in rental costs during builder-caused delays
Made full payments for incomplete work, losing all negotiation leverage

Total unnecessary cost: $40,000+

All of this could have been prevented by understanding five contract clauses before signing.

"The homeowners who have the smoothest builds aren't the ones who never have problems – they're the ones who know their contract well enough to address problems immediately when they arise."

Your pre-signing contract checklist:

Before you sign any building contract in Australia, check these elements:

Complete inclusions list with specific products, brands, and model numbers
Clear start and completion dates (not "approximately" or "estimated")
Liquidated damages clause with a daily rate specified
Fixed contract price with PC and provisional sums clearly identified
Payment schedule tied to specific, measurable milestones
Variation process that requires written approval before work proceeds
Defects liability period clearly defined
Dispute resolution process outlined

If any of these elements are missing or unclear, that's a red flag. Address it before signing.

Building your dream home with confidence

Over the past 8 years, I've reviewed hundreds of Australian building contracts. The clients who invest 2-3 hours understanding their contract before signing save an average of $15,000-$30,000 during their build – not to mention months of stress and frustration.

Here's what happens when you start your build knowing your contract:

You identify unfair terms and negotiate better protections before signing
You know exactly how to handle variations, delays, and payment disputes
You understand your defects rights and how to enforce them
You build with confidence instead of anxiety
Your builder respects you because you understand the process

Ready to build without the stress?

My Building Contract Health Check gives you everything you need to build confidently:

Full contract review identifying risks and unfair terms
Analysis of your defects clause and warranty protections
Calculation of your liquidated damages entitlement
Ready-to-send email requesting contract improvements
Follow-up support until you sign with confidence

I work with clients across Victoria, NSW, Queensland, ACT, Tasmania, Western Australia, and the Northern Territory.

In the past 12 months alone, I've helped clients:

Negotiate improved contract terms before signing
Recover liquidated damages for builder delays
Avoid costs that weren't actually their responsibility

Learn more about a Building Contract Health Check

Start your home-building journey with confidence, master your building contract, and stay in control through your entire project.

Thanks for reading, and I'll see you in my next post!

Annelyse

Construction Management | M. Construction Law

Follow me @_buildtogether for daily tips on building and renovation contracts.

5 mistakes when building a new home in Australia