8 ways to save time and money in your building contract
Written By Annelyse Stead | Australian Home Building & Renovation Contract Specialist | M. Construction Law | B.Construction ManagementPeople think the hardest part of building is choosing the right builder. But actually, it's understanding what's in your contract.
You've found your dream builder. The quote looks reasonable. The timeline seems achievable. You're ready to sign on the dotted line.
But here's what most people don't realise: every building contract I review contains hidden time and cost traps that could blow your budget by thousands of dollars.
While most builders use standard industry templates, it's the individual elements—the special conditions, the allowances, the exclusions—that make each contract unique. And it's exactly these specifics that need a close review to avoid costly surprises down the track.
In my work reviewing HIA and Master Builders contracts across Australia, I've identified eight key areas where homeowners consistently lose time and money. Let me show you what to look for.
1. Defining reasons for variations
Variations are the number one cause of budget blowouts in residential construction. In fact, research shows that the average Australian home build experiences variations totalling 10-15% of the original contract price.
But here's the thing: not all variations are created equal.
I recently worked with a client in Melbourne whose builder was trying to charge them $8,000 for "unforeseen site conditions" that were clearly visible in the soil test report attached to their contract. Because we'd defined clear reasons for variations upfront, my client had grounds to dispute the charge.
In your contract review, I help you:
Identify what constitutes a legitimate variation versus builder preference
Set price caps on variation categories
Establish a clear approval process before any variation work begins
Real result: One Queensland client saved $12,000 by understanding which "variations" were actually included in their original scope.
2. Specifying grounds for extensions of time
Time is money in construction. Every week of delay can cost you in rental payments, storage fees, or lost opportunity costs.
Most standard contracts give builders broad rights to claim extensions of time. But vague extension clauses leave you vulnerable to indefinite delays with no recourse.
I worked with a Sydney couple whose builder claimed a 12-week extension due to "supply delays." When we reviewed their contract, we discovered the extension clause was so loosely worded that the builder had no obligation to prove they'd even attempted to source alternative materials.
A well-drafted extension clause should specify:
What documentation the builder must provide to justify an extension
Whether the builder must demonstrate reasonable efforts to minimise delays
What compensation (if any) you're entitled to for delays beyond the builder's control
Clear timelines for notifying you of potential delays
3. Explaining complex processes
Building contracts are full of legal jargon and multi-step processes that even lawyers find confusing.
What happens if you want to dispute a variation? How do you trigger the defects liability period? What's the actual process for practical completion?
Understanding these processes before you need them is crucial. I've seen clients lose their right to dispute defects simply because they didn't follow the exact notification process outlined in their contract.
In my contract reviews, I create simple flowcharts and checklists that show you:
Step-by-step processes for common scenarios
Critical deadlines you must meet
What documentation to keep and when
Red flags that indicate you should seek immediate advice
Think of it as your contract instruction manual—written in plain English.
4. Checking for hidden exclusions
This is where most homeowners get caught out.
You see a quote for $450,000 and assume that's your total build cost. But buried in the fine print are dozens of exclusions—items and tasks that aren't included in the contract price.
Common exclusions I find include:
Site preparation and clearing
Driveway and landscaping
Fencing
Blinds and window coverings
Clothesline and letterbox
Connection fees for utilities
Council and certification fees
A Canberra client came to me with a $380,000 fixed-price contract. After reviewing the exclusions list, we calculated an additional $47,000 in necessary work that wasn't included. That's a 12% hidden cost increase.
5. Anticipating avoidable variations
Here's something most people don't realise: many variations could be avoided with better planning upfront.
When I review your contract alongside your architectural plans and specifications, I'm looking for mismatches and gaps that will inevitably lead to variations during construction.
For example:
Your plans show a specific tap style, but your contract lists "builder's standard fixtures"
Your roof design requires custom flashings, but the contract assumes standard profiles
Your site has a slope, but the contract doesn't include retaining wall allowances
A Victorian client saved $15,000 by identifying these mismatches before signing. We were able to clarify specifications and adjust allowances, locking in prices before construction started.
Prevention is always cheaper than variation.
6. Benchmarking cost allowances
Allowances are provisional sums included in your contract for items like tiles, fixtures, appliances, and landscaping. The problem? Builder's allowances rarely reflect actual market prices.
I recently reviewed a contract with a $4,000 allowance for kitchen appliances. When my client went to select appliances, even mid-range options came in at $8,500. That's a $4,500 variation they weren't expecting.
Common allowance shortfalls I see:
Tiles: Contract allows $40/m², realistic price $65-80/m²
Kitchen appliances: Contract allows $5,000, realistic price $8,000-12,000
Tapware: Contract allows $800, realistic price $1,200-2,000
Landscaping: Contract allows $5,000, realistic price $15,000-25,000
Understanding these gaps early means you can either negotiate higher allowances before signing or budget accordingly for the inevitable cost increases.
7. Checking for inconsistencies
Building contracts typically consist of multiple documents: the main contract, special conditions, plans, specifications, and various schedules. Inconsistencies between these documents create ambiguity—and ambiguity always favours the builder.
I look for conflicts like:
Plans showing feature tiles, but specifications listing standard tiles
Special conditions contradicting terms in the main contract
Schedules of finishes that don't match the allowances provided
Scope descriptions that conflict with the architectural drawings
A Brisbane client's contract showed a discrepancy between the floor plan (which included a butler's pantry) and the scope of works (which didn't mention it). The builder later claimed the butler's pantry was a $12,000 variation. Because we'd identified and documented the inconsistency before signing, my client had leverage to negotiate.
Most contracts include a "hierarchy of documents" clause that determines which document takes precedence in case of conflict. Understanding this hierarchy is critical.
8. Defining roles and responsibilities
Who's responsible for what? It seems like a simple question, but unclear roles and responsibilities are a major source of delays and disputes.
Key questions I help clients answer:
Who's responsible for coordinating site access for separate trades (like solar installers)?
Who handles council inspections and certification?
What are your obligations during the build?
Who's responsible for protecting completed work from damage by other trades?
What's the builder's obligation to supervise subcontractors?
A Perth client was charged $3,500 in "project management fees" because they arranged their own pool installer. Their contract didn't clearly define whether they could engage separate contractors or what coordination responsibilities the builder had.
How I help: predicting problems, not making changes
Here's an important distinction about my contract review service:
I don't focus on making lots of changes to your contract. In most cases, standard industry contracts (HIA and Master Builders) are reasonably well-drafted from a legal perspective.
Instead, I help you:
Understand exactly what you're signing
Predict potential time and cost issues before they arise
Identify the protections (or gaps) in your specific contract
Develop strategies to manage risks throughout the build
Create communication tools and checklists you'll need later
Think of it as a health check rather than surgery. I'm giving you a complete picture of your contract's strengths and weaknesses so you can make informed decisions.
The real cost of not reviewing your contract
I get it—you're excited to start building. The last thing you want is to delay things with a contract review.
But consider this: the average Australian homeowner who doesn't review their contract before signing experiences cost overruns of $30,000-50,000. The most common issues? Unclear allowances, hidden exclusions, and avoidable variations.
A contract review typically costs $800-1,500. If it saves you even one unnecessary variation, it's paid for itself many times over.
More importantly, it gives you something invaluable: confidence.
Confidence that you understand what you're signing. Confidence that you've planned for the real costs. Confidence that you know what to do when issues arise (because they will).
Building contract reviews for new home builds and renovations
If you're looking for a independant review of your building contract at a fixed price, you can find out more information about my Building Contract Health Checks here.
I support clients with their HIA and Master Builders home building contracts from all states in Australia, including Victoria, ACT, Queensland, New South Wales, Tasmania, WA, and the Northern Territory.
Is a contract review right for you?
My Building Contract Health Checks are perfect for people who:
Want to understand their contract before they sign
Like to dive into the details and understand the "why" behind contract terms
Want education on what makes a good contract and what to watch out for
Value prevention over problem-solving
If that sounds like you, we're a great match.
My goal is simple: I want you to walk away from our session with complete confidence to proceed with signing your contract.
I’ll go through all your questions—how to avoid delays, what to watch out for, how to keep costs within your original building quote, and what to do when issues arise.
In the past year alone, I've helped clients identify and avoid over $300,000 in unnecessary costs and variations. My average client saves $15,000-20,000 by understanding their contract before signing.
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.
