Building contracts and building disputes in Western Australia

Get the contract reviewed before you sign it

The cheapest hour anyone spends on a building project is the one before signing. A residential building contract sets the price basis, the deposit, the progress payment stages, what happens when the site or the design changes, how long the builder has, what happens if they run late, and what you can do if the work is not to standard. Most of the disputes we see were decided at signing and only discovered eighteen months later. Standard-form contracts are not neutral documents, and the schedules and special conditions are where the risk usually sits.

The Home Building Contracts Act 1991 (WA)

Home building work contracts in Western Australia within the value range set by the Act are regulated: the contract must be in writing, the deposit that can be taken is limited, certain terms must be included, and there are restrictions on how the price can be varied. If your contract falls within that range, protections apply whether or not the contract mentions them, and a term that tries to contract out of them will not do what the builder hopes. The first question in any residential building matter is therefore whether the Act applies to this contract, because the answer changes what both sides can do.

Home indemnity insurance

Residential building work in Western Australia above a prescribed value generally requires home indemnity insurance to be in place before work starts, protecting the owner if the builder dies, disappears or becomes insolvent. Owners should confirm the policy exists and covers the work before paying a deposit, because discovering there is no policy at the point the builder collapses is discovering it far too late. There are limits on what the cover does and does not extend to, and it is not a substitute for a properly reviewed contract.

Defects, delay and variations

Three issues generate most residential building disputes. Defects: work that does not meet the contract, the plans, the National Construction Code or the standard of a competent builder - and the distinction between a defect and a matter of finish or tolerance is where these arguments actually live. Delay: whether the builder is entitled to an extension of time, whether the owner caused any of it, and whether liquidated damages are payable. Variations: work outside the original scope, which should be priced, documented and signed before it is carried out. A variation invoiced after the event, with no signed authority, is one of the most commonly disputed items on any building account.

Complaining to the Building Commissioner

Building and Energy, within the Department of Energy, Mines, Industry Regulation and Safety, administers the building services complaint process. A homeowner can lodge a complaint about defective or incomplete building work, and the Building Commissioner can investigate and make a building remedy order requiring the builder to fix the work, or order payment. This pathway is generally cheaper than litigation and is often the right first step for a homeowner with defective work. Time limits apply, they run from completion of the work, and they should be checked at the outset rather than assumed.

Security of payment for contractors and subcontractors

The Building and Construction Industry (Security of Payment) Act 2021 (WA) gives contractors, subcontractors and suppliers a fast route to a progress payment. A payment claim is served, the respondent has a limited period to serve a payment schedule, and if it does not, or if the amount is disputed, the claimant can apply for adjudication. The determination is enforceable and the process is measured in days rather than months. It is deliberately rapid, and that cuts both ways - a respondent who misses the payment schedule deadline can lose the right to raise its reasons for withholding at all. Anyone on either side of a payment claim should get advice immediately, not after the deadline.

The State Administrative Tribunal and the courts

Decisions of the Building Commissioner can be reviewed in the State Administrative Tribunal. A straightforward contractual claim - unpaid money, damages for defective work, termination - is a court matter, and which court depends on the amount in dispute, with the Magistrates Court, District Court and Supreme Court each having their own limits. Choosing the forum is a strategic decision as much as a technical one, because cost, speed and the availability of expert evidence differ between them.

Evidence decides building disputes

Building cases are won on records, not recollection. Photographs dated as the work progressed, the signed contract and every variation, all site instructions and emails, the progress payment schedule and what was actually paid, defect lists sent to the builder and the responses, and an independent building inspection report. An owner who starts photographing and emailing from the beginning is in a materially better position than one who starts when the relationship breaks down. If you are already in dispute, the single most useful step is usually an independent expert report on the defects.

For builders and subcontractors

The same discipline protects the other side. A builder with a signed contract, signed variations, contemporaneous site records, documented extension of time claims made within the contractual timeframe, and a proper payment claim process is in a strong position. A builder who did the right thing on site but recorded none of it is not. Where a complaint has already been made to the Building Commissioner, the response matters and should not be written without advice.

Building advice in Vietnamese

Building contracts are long, technical and written in language that is difficult even in a first language. Vinh Nguyen speaks fluent Vietnamese and can explain what a contract commits you to, what a variation actually means, and what your options are when work is defective or delayed - before a deposit is paid or a dispute hardens.

• Vietnamese-speaking legal help →

Process

1. 1

   We read the contract and identify whether the Home Building Contracts Act applies.

2. 2

   We work out which pathway fits - complaint, adjudication, negotiation or court - and what the time limits are.

3. 3

   We review the defect, delay or variation position against the contract and the records.

4. 4

   We advise on the evidence you need, including whether an independent expert report is warranted.

5. 5

   We negotiate with the builder or owner first, because most of these resolve without a hearing.

6. 6

   We prepare the complaint, adjudication application or court claim where it is needed.

What to prepare

• The building contract, all schedules, special conditions and signed variations.
• Plans, specifications and any engineering or design documents.
• The progress payment schedule and a record of what has been paid.
• All site instructions, emails and messages with the builder or owner.
• Dated photographs of the work as it progressed.
• Any defect list already sent, and the response.
• Home indemnity insurance details, and any building permit or occupancy permit.
• Any independent building inspection report.

Risks, deadlines and common mistakes

• Signing a standard-form building contract without reading the schedules and special conditions.
• Paying a deposit before confirming home indemnity insurance is in place.
• Accepting variations verbally and arguing about them at the final invoice.
• Missing a security of payment deadline, which can forfeit the right to raise reasons for withholding.
• Letting a complaint time limit run while negotiating with the builder.
• Withholding payment without a contractual basis, which can put the owner in breach.
• Starting court proceedings when the Building Commissioner pathway would be faster and cheaper.