Form 13D to Form 13E: Contract updates

HIA has made several changes to this contract that builders should be aware of. This resource provides a summary of those amendments, to assist contract users in understanding the differences between the Form 13D to the Form 13E.

Why were changes made?

HIA carries out regular contract reviews to ensure our contracts continue to function well and remain up to date with regulatory requirements. As a part of this process, we have identified some improvements to the Form 13D Cost Plus Contract.

We appreciate that builders have developed a familiarity and understanding of the terms included in the HIA contracts and have implemented systems within their businesses based on the contract structure. We also understand that any departures from these systems have an administrative impact for businesses. To this end, we have ensured the changes to the contract are minimal and focused on core areas of improvement.

What has changed?

If you sign a Form 13E you will need to ensure the processes you have in place within your office, as well as standard forms and letters, are updated to reflect any functional changes.

General Updates

The most notable change throughout the contract is the updated language and structure of clauses, including:

• Additional clause numbering
• Headings
• Simplified language
• Shorter sentences and paragraphs

We have also included a new ‘Interpretation’ section in Clause 23 which includes a number of important definitions. We strongly recommend that before using this contract you review the definitions which are in bold text throughout the contract.

Ultimately these changes will assist both contracting parties in understanding the requirements and meeting their obligations under the contract.

Formatting

Various formatting changes have been made throughout. This will mean the contract looks a little bit different, but the meaning and functionality largely remains the same. Examples include the way legislative references and working days are written.

Summary of key changes 

Notice

There is a new notice on the first page of the contract which states: “Notice: The owner and the builder acknowledge that this is a cost plus contract and the Home Building Contracts Act (WA) 1991 does not apply, except for section 14 and Part 3A”. This is a requirement under the legislation.

Clause 1 – Agreement to build

We have simplified clause 1(a) into two clear subclauses:

• Clause 1.1 sets out what the builder is agreeing to do.
• Clause 1.2 states that the owner must pay the cost of the works as adjusted under the contract.

We have inserted a new heading ‘Home Indemnity Insurance’ and broken clause 1(b) up into 4 subclauses, including:

• Clause 1.3 confirms that the following subclauses only apply where home indemnity insurance is required by the legislation.
• Clause 1.4 – The builder must not perform any of the works or make a demand for payment until the owner has been provided with evidence of the home indemnity insurance policy.
• Clause 1.5 – If the builder is unable to obtain the insurance, the builder must notify the owner as soon as possible. In that case, either party can terminate the contract by written notice to the other. This is because the contract cannot continue unless home indemnity insurance is obtained.

Clause 2 – Owners warranties

• Clause 2(a) has become Clause 2.1 and has two subparagraphs to make it easier for the parties to follow.
• The last sentence of Clause 2(a) has been moved to Clause 2.2.
• Clause 2(b) is now Clause 2.3.
• Clause 2(c), which provided an authorisation by the owner that the builder could take out home indemnity insurance, has been deleted.
• Clause 2(d) is now Clause 2.4 and the subsequent clauses are renumbered accordingly.

Clause 3 – possession of the site and all weather access

There are now two sections to this clause. Site possession issues are dealt with under clause 3.1 to 3.4. All weather access is dealt with in Clause 3.5.

Site possession 

Key definitions: site

• Clause 3.1 – The owner must give the builder possession of the site to carry out the works.
• Clause 3.2 – This clause has been added to assist members who are carrying out renovation and addition projects where the owner is going to remain in possession of the site. This clause requires the owner to do certain things during those types of projects.
• Clause 3.3 – The owner and their agents must not interfere the builder or the works or do other things prohibited under this clause. There is also a restriction on access to the site under this clause.
• Clause 3.4 – Confirms that the builder must be provided with reasonable access to the site after practical completion has been reached.

All weather access

Key definitions: all weather access

• Clause 3.5 states that the owner must provide all weather access and if not, the builder can claim as a cost under the contract any work or expenses required to achieve access.

Clause 5 – Builders duties  

Key definitions: statutory or local authority

• Clause 5(a) has been broken up into Clause 5.1 and 5.2. Otherwise, the clause remains largely the same other than updates to the language and definitions used..

Clause 6 – Costs

In addition to the numbering being updated, we have amended clause 6.1(h) (previously 6(a)(viii)) to clarify the builder’s ability to claim for connection fees and charges related to temporary or permanent supply, which includes services such as power and water.

Clause 8 – Insurance  

Clause 8(a) has been broken up into Clause 8.1 through to 8.4.

A new clause 8.7 now covers insurance issues for renovation and addition projects. The clause requires the owner to have suitable insurance for the existing improvements and contents. The term ‘improvements’ means the existing home, other buildings, hard landscaping and other fixtures to the site.

The homeowner must confirm they can obtain insurance for the existing improvements prior to the contract being signed. If they are unable to obtain this insurance, the builder may be able to provide coverage under their works policy. However this must be confirmed with the insurer and is usually subject to certain conditions of the policy, and which may need to be reflected in the contract using a special condition.

Clause 9 – Variations

Clause 9(a) and 9(b) are now split across 9.1 to 9.3. Clause 9.1 has been amended to clarify that the builder may decline to agree to a variation requested by the owner.

Clause 19 – Notices

The notices clause has been updated and simplified. Importantly:

• the option to issue a notice by facsimile has been removed;
• all notices are deemed to be delivered immediately except for if sent by ordinary post which is deemed delivered 5 business days after it is sent; and
• all notices are now permitted to be delivered by email or other electronic means. 

Clause 20 – Computation of Time

We have deleted clause 20 computation of time. Instead, there is a definition of ‘days’ in the Interpretation clause which states that days are business days. This is the same method of calculation as the Form 13D.

Clause 21 – Severance

We have replaced the previous severance clause with an updated and simplified severance clause.

When will the changes take effect?

Importantly, the Form 13D contract is still compliant. This means both signed and unsigned copies, including any hardcopies you have on hand, can still be used.

Form 13E will be available through Contracts Online and the HIA Shop during April 2025.

To find out more, contact HIA's Contracts and Compliance team

Email us