Changes to HIA NSW Residential Building Contract for Small Works over $20,000

What has been amended?

Addition to the Contract Price Warning

The Home Building Act 1989 (‘Act’) requires that a warning (contract price warning) be placed next to the contract price indicating that the price may change.

The contract price warning is included on the first page of the contract, next to the price, identifying:

• The contract clauses that may change the contract price (clause number and what causes the change, e.g. cost of a survey, or adjustment for allowances); and
• The effect of that change, i.e. whether the change would increase or decrease the price.

HIA has now updated the contract to allow builders to include any special conditions which may also impact the contract price, in the price warning. This change will apply to contracts in both hard copy and on Contracts Online.

Example:

A special condition (“Special Condition 3”) has been included in the contract between a contractor and an owner that allows an administration fee of $100 to be applied to any variations requested by the owner.

As this fee may change the contract price, the special condition should be included in the contract price warning. Both the relevant clause should be identified (e.g.SC3) and the change that varies the contract price e.g. (administration fee for variations).

Special Conditions

The contract now includes a Special Conditions item allowing any additional terms to be included in the contract itself, rather than by way of annexure of another document.

HIA recommends that independent legal advice is sought before drafting and adding special conditions to a contract to ensure any terms are consistent with the contract, are clear and certain, and do not contravene any laws. Further, extra care should be taken where a special condition seeks to vary the contract price, either upward or downward.

Notice Clause

A Notice Clause has been added to the contract, which clarifies the method by which any notice required under the contract must be issued and served.

Are updated contracts available?

Yes, updated Small Works over $20,000 are available through HIA Contract Online and hardcopy contracts are in the process of being reprinted.

Is my contract still compliant and enforceable?

Yes. If you have signed the HIA NSW Residential Building Contract for Small Works over $20,000 dated May 2021 v3, your contract remains compliant. However, if you have included special conditions in your contract that may vary the price and have not identified them in the contract price warning, caution should be exercised if relying on that condition to increase the contract price.

This information sheet is provided for general informational purposes only and does not constitute legal advice. Independent professional advice should be obtained for your specific circumstances.

The above is intended to provide general information in summary form. The content does not constitute specific advice and should not be relied upon as such. Formal advice should be sought by members and customers with respect to particular matters before taking action.