Updates to SA Building Contract for Alterations and Additions – August 2026

Is my contract still compliant and enforceable?

Yes. If you have signed the HIA SA Building Contract for Alterations and Additions dated August 2024, your contract remains compliant.

What has changed in the Contract Schedule?

Several changes have been made to improve the contract including:

Item 11 - Prime cost Item and provisional sum items and allowances

The contract now includes a Provisional Sum Item in the building schedule. Previously, the contract only included a schedule for Prime Cost Items.

• Prime cost items are fixtures and fittings that have not been selected by the owner at the time of entering into the contract. Examples include kitchen stoves, bathroom tiling, or water taps.
• Provisional sum items refer to the estimated cost of doing certain building works, e.g. earthworks. It is typically used where the builder is unable to provide a fixed or definite price. For example, this might be because there are unknown factors.

The "allowances" stated in the Contract Schedule are estimates only and are subject to change. However, it is important to ensure that the allowances are a reasonable estimate of the expected costs. The contract also accounts for a margin to be applied on the excess, if the actual costs exceed the allowance. The maximum margin permitted in South Australia is capped at 15%.

It is important to read Clause 6 of the contract in full (see further below).

Item 14 - Default interest rate

This allows builders to specify the interest rate that will apply if the owner is late in making payment. If this section is left blank it will default to the Supreme Court judgement interest rate.

Item 15 - Other contract documents

The contract now allows for builders to include any other documents with the intention that they will form part of the contract. The documents listed in this section will be in addition to the standard contract documents which includes any special conditions, general conditions, specifications and plans signed by both the owner and builder.

Item 17 - Date of contract

The date of contract is the date on which the last person signs the contract. This date has now been moved to the Building Schedule, whereas it was previously located on the signature page. The change ensures consistency in how it is referenced throughout the contract.

What has changed in the building contract conditions?

Clause 1 – Definitions

This Clause was previously called "special meanings." The Clause provides definitions for certain words that are used under the contract. Specifically, any words that are in bold will have a defined meaning under this Clause. This Clause has been updated to include new definitions, for new defined words including:

• all weather access
• builder
• contract documents
• contract price
• date of contract
• owner
• restricted access

Clause 2 – Builder obligations

This Clause expands upon the builder's obligations by requiring:

• compliance with all applicable laws and statutory requirements
• confirmation that the works must be completed within the building period (or a reasonable time)
• clarification that if the builder intends to use any materials that are not new, this must be specifically disclosed and agreed through a Special Condition.

Clause 3 – Payment of the contract price

Clause 3.4 has been updated to specify that the builder cannot claim a progress claim until the works have been completed. This reflects the rules imposed by the relevant legislation. It is important that builders ensure that their administrative practices reflect this requirement.

A new Clause 3.5 permits the builder to reasonably request that the owner provides evidence of their capacity to pay the balance of the contract price.

Clause 4 – Extra cost

Clause 4 has been updated to specify that if extra costs are incurred, the builder will provide a written notice within seven days of becoming aware of these additional costs. It requires the owner to pay the additional costs with the next progress claim.

Clause 6 – Prime cost items and provisional sum items

Clause 6 has been rewritten and now sets out the process for:

• the selection of prime cost and provisional sum items
• the allowance applied to each item referred to in Item 11 of the Schedule
• when adjustments to the contract price are due and payable.

Clause 10 – Possession of the site

Clause 10 has been revised to clarify the terms that apply in the event of unlawful early possession by the owner and the actions available to the builder. These actions include treating the owner’s conduct as a repudiation of the contract, issuing a notice to remedy breach, or accepting the early possession as completion of the works as at the date possession was taken.

Clause 11 – Access to do the work

Clause 11 has been updated requiring the owner to:

• provide "all weather access". This is a defined term under the contract.
• arrange any necessary access from a neighbouring property.

If the builder incurs additional costs to gain access, the contract provides that these costs will be passed on to the owner as a variation. The owner's consent is required for this variation, but it must not be unreasonably withheld.

Clause 12 – Time for doing the work and delay damages

If a finish date is specified in the contract, the builder may extend this date by issuing a written notice. The written notice must specify:

• the cause of the delay;
• the extension of time;
• the expected change to the finish date; and

must be provided to the owner as soon as the builder becomes aware of the cause and extent of the delay.

This new clause and the requirement to provide detailed written notice aligns with industry best practices.

New Clauses 12.6 to 12.8 set out the procedures to claim for delay damages. These are the increased costs that the builder may incur due to delays caused by the owner.

Clause 13 – Variations with the owner’s consent

To reflect common practice, variations can now be accepted by signing, approving or otherwise consenting to it within 5 days the quote was provided. Approval or consent must be in writing to avoid any disputes later.

Clause 16 – Variations to comply with the Engineer’s report

Similarly to Clause 13, variations can be accepted by signing, approving or otherwise consenting to it. The contract may be terminated if the owner does not accept the quote provided to comply with the Engineer’s report within seven days.

Previously, if the contract was ended under this Clause, the owner was only liable to pay a maximum amount of $1,650 as payment for the cost of preparing plans, obtaining the Engineer’s report, or conducting any wind assessment, contour plan, or site survey. This Clause has been removed, and the owner must pay the builder the builder’s actual costs.

Clause 34 – Termination of contract

Clause 34 sets out a new process for termination of contract. In the event of a breach, the Clause now requires that:

• the party in breach must be given a written breach notice that sets out details of the breach (and other details included at Clause 34.4)
• the party in breach must be given five days to remedy the breach
• if the breach is remedied the contract cannot be terminated
• if the breach is not remedied, the contract can be ended by issuing further written notice.

As terminating a contract carries significant legal risk, it is essential to seek advice from a solicitor before taking steps to terminate the contract to ensure that you are not in breach of the contract.

Clause 39 – Conciliation

This clause introduces a new requirement for the parties to first attempt to jointly appoint a mutually agreed conciliator to assist in resolving the dispute. If the parties cannot reach agreement on a conciliator, HIA may then assist by appointing one on behalf of the parties.

Clause 40 – Dispute reference

HIA is no longer holding monies in trust on behalf of the dispute referee. Accordingly, HIA will only charge an appointment fee and assist in appointing a dispute referee on behalf of the parties to the contract. The parties shall pay the dispute referee’s fees directly or as otherwise directed by the dispute referee. The appointment fee is currently set at $200 and may be changed from time to time.

Clause 44 – Order of precedence

This is a new clause which gives the contract documents a priority order. This clause is relied upon if there is conflicting information between the contract documents.

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.