What happens before you build?

Once the plans for your house have been drawn up for the block you have bought, you can enter into a contract with your preferred builder to undertake preparatory work only.

This agreement is generally not a contract to build but you should check that this is the case.

The purpose of undertaking preparatory work is to give you a good idea about the basic costs of building your house. However, it is not a final cost, as some actual costs may only become apparent once the surveys are completed and engineering details are known. You should discuss this matter with your builder.

The written agreement should also set out the type of preparatory work that will be done for you. This may include general inspection of the block to note any special requirements that need to be taken into consideration or consideration of the site conditions and the likely costs of preparing the foundation. Other factors that should be considered include preparation of any special structural engineering details and preparation of detailed drawings and specifications.

The fee for undertaking the preparatory work should be included in the agreement, but there may be provision for this fee to be varied for difficult or unusual sites. The fee for undertaking the preparatory work for a Preparation of Plans Agreement is normally not refundable. However, some builders may agree to deduct the fee you have paid them for the deposit payable, if you later agree to sign a building contract with that builder.

Make sure you read the Preparation of Plans Agreement carefully and get independent legal advice before you sign.

It should be noted that the Preparation of Plans Agreement does not generally give you copyright over the plans.

It should also be noted that some Preparation of Plans Agreements allow the builder to make applications for a local authority building license and for Water Corporation approval. Consider before signing whether you want to incur the expense of such approvals at this stage, or delete this clause and check that these tasks form part of the building contract.

Beware of any forms that commit you to signing a building contract with the builder at a later stage.

About Darren Standish

Darren Standish established Property Prosperity in 2004 initially as a property development company, however after repeated requests for assistance the business evolved into a development consulting business.

Property Prosperity was initially focused on assisting clients with subdivisions and negotiating with councils to ensure that clients maximized their return on investment. Over the years additional services were gradually added to ensure the development process was as seamless as possible for its clients. We expanded into offering individually tailored finance solutions and then added Property Development Analysis, Property Sales and a Builder Broker Services.

Darren is the overachiever of the team and has more qualifications than your average university graduate. As well as completing a Bachelor in Economics, Bachelor in Commerce and post graduate in Accounting he subsequently went on to complete a Diploma in Financial Service, Diploma in Real Estate and Certificate IV in Building. He is a qualified Certified Practicing Accountant (CPA), a licensed Real Estate Agent, licensed Mortgage Broker and holds a Builders License.