How to check the Financial Stability of Your Builder
Here’s how to check that your builder has a good credit history and the funds to support your new home build.
Here are my top 3 tips give you confidence that your new home builder is financially secure:
1. Online Financial Checks:
Most builders work off a credit cashflow arrangement to have the funds to order materials and pay for labour before you pay their progress claim at completion of each milestone. For this to work on your build, your builder needs to have a secure credit history.
You start by asking your builder for a report from their credit agency. If they aren’t willing to share this, there are a few paid online platforms dedicated to verifying the credit history of builders. CreditWatch is a good example. These websites offer comprehensive reports on a builder’s financial health, including credit ratings, financial statements, and business history.
2. Verify Builder's Licence:
Verifying that your builder complies with your States registration business requirements is crucial to ensure their aren’t unresolved issues on previous builds that may jeopardise the company. For those building in Victoria, the Victorian Building Authority (VBA) offers a convenient online tool to verify the credentials of registered builders.
3. Request Insurance Certificates:
Each contract specifies that types of insurance your Builder must have in place before any deposit is paid or building works start. I always encourage my home building clients to take a proactive approach to Building Insurance by asking their builder for the Certificates of Insurance as a priority after signing the contract.
During our Building Contract Health Check, I work with clients to ensure the 3 essential insurance policies are in place before works begin to make sure their build is protected through the entire building journey.
How to reduce risk during your home build
The clauses that actually matter
Financial stability isn't just about your builder's bank account. It's about how your contract handles:
Payment schedules: Are you paying for work that's completed, or paying in advance and hoping it gets done?
Insolvency clauses: What actually happens to your deposit and your half built house if your builder's company folds?
Delay penalties: Does your builder face any real consequences for dragging out your build?
These are the details that determine whether you're protected or exposed. And most contracts? They're written to protect the builder, not you.
What to do instead
The smartest thing you can do isn't just vet your builder. It's to make sure your contract gives you real protection if things go sideways.
Before you sign anything, you need someone in your corner who knows exactly which clauses to push back on, which payment terms actually protect you, and how to structure your contract so you're not left holding the risk.
That's exactly what I do in a Building Contract Health Check. We go through your contract together and I show you:
Where your payment schedule leaves you exposed
Which clauses let your builder pass costs and delays onto you
What leverage you actually have if your builder's priorities shift mid build
How to restructure key terms before you sign so you're protected from day one
Because a quality build doesn't just come from choosing a good builder. It comes from having a contract that protects you even when things don't go to plan.
Know exactly what you're signing, before you build
Get a Building Contract Health Check and make sure your contract actually protects you:
Spot the clauses that leave you exposed to cost blowouts
Lock in payment terms that give you real leverage
Sign with confidence knowing you're protected through the entire build
