5 traps to look out for before signing a building contract

By Staff Reporter
signing a building contract

Luke Carroll, EC Credit Control & Tradebusters Connect

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Five key things you need in a contact. Number one; Contractor's license details. This is much like a quality assurance label you might see on a consumer product. Confirms you're dealing with a legitimate and qualified trades person to complete the job. Second; an accurate description of the works to be carried out. If it's not an accurate description, don't sign the contract. You're heading straight towards a dispute. Third; the contract price should be clearly displayed on the first page or alternatively if it's not displayed, a reasonable explanation given for why it's not. If it's not displayed accurately and clearly, don't sign the contract. You're heading straight towards a dispute. Fourth; deposits and progress payments. Guys it's pretty simple rules. For jobs under $20k, 10% deposit is the maximum allowable. For jobs above $20k, 5% deposit. In relation to progress payments, your trades person can't ask you to pay for more than the work that's already been done. And finally; home warranty and insurance is a requirement for any job above $20 000 in value. It's designed to protect you as a home owner from any loss that you may incur on a job that's incomplete or faulty where your trades person has become insolvent or disappeared.

Listen to other instalments of The Smart Property Investment Show:
Episode 95: The top 10 things every investor should check before buying a property
Episode 94: BONUS EPISODE: From 1 to 28 properties – what's his secret?
Episode 93: 28 properties and an $11.5 million portfolio – how this investor did it
Episode 92: BONUS EPISODE: Investor reveals top tips for better property management
Episode 91: Why being 'pedantic' about property will enable this investor to be debt-free by 45
Episode 90: Portfolio update: SPI gives the inside scoop on its latest property purchase
Episode 89: Renovating as a couple: two young investors share their story
Episode 88: Everything you want to know about the short-term rental market revealed
Episode 87: BONUS EPISODE: Former Olympian shares his property development know-how
Episode 86: How a former Olympian found new sport in property development: Ed Fernon's success story
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5 traps to look out for before signing a building contract
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