{{ propApi.closeIcon }}
Our industry
Our industry $vuetify.icons.faArrowRight
Economic research and forecasting Economics Housing outlook Tailored market research Economic reports and data Inspiring Australia's building professionals HOUSING The only place to get your industry news Media releases Member alerts Submissions See all
Business support
Business support $vuetify.icons.faArrowRight
Become an apprentice host Hire an apprentice Why host a HIA apprentice? Apprentice partner program Builder and manufacturer program Industry insurance Construction legal expenses insurance Construction works insurance Home warranty insurance Tradies and tool insurance Planning and safety services Building and planning services How can HIA Safety help you? Independent site inspections Solutions for your business Contracts Online HIA Tradepass HIA SafeScan HR Docs Trusted legal support Legal advice and guidance Professional services Industrial relations
Resources & advice
Resources & advice $vuetify.icons.faArrowRight
Building it right Building codes Australian standards Getting it right on site See all Building materials and products Concrete, bricks and walls Getting products approved Use the right products for the job See all Managing your business Dealing with contracts Handling disputes Managing your employees See all Managing your safety Falls from heights Safety rules Working with silica See all Building your business Growing your business Maintaining your business See all Other subjects COVID-19 Getting approval to build Sustainable homes
Careers & learning
Careers & learning $vuetify.icons.faArrowRight
A rewarding career Become an apprentice Apprenticeships on offer Hear what our apprentices say Advice for parents and guardians Study with us Find a course Get your builder's licence Learn with HIA
HIA community
HIA community $vuetify.icons.faArrowRight
Join HIA Sign me up How do I become a member? What's in it for me? Get involved Become an award judge Join a committee Partner with us Get to know us Our members Our people Our partners Mates rates What we do Mental health program Charitable Foundation GreenSmart
Awards & events
Awards & events $vuetify.icons.faArrowRight
Awards Australian Housing Awards Awards program National Conference Industry networking Events
HIA products
HIA products $vuetify.icons.faArrowRight
Shop @ HIA Digital Australian Standards Contracts Online Shipping and delivery Purchasing terms & conditions Products Building codes and standards Hard copy contracts Guides and manuals Safety and signage See all
About Contact Newsroom
$vuetify.icons.faTimes
$vuetify.icons.faMapMarker Set my location Use the field below to update your location
Address
Change location
{{propApi.title}}
{{propApi.text}} {{region}} Change location
{{propApi.title}}
{{propApi.successMessage}} {{region}} Change location

$vuetify.icons.faPhone1300 650 620

What is a preliminary agreement?

It is common practice for a builder in Victoria to enter into a preliminary agreement before they commit to a building contract. This preliminary agreement could be to complete work such as preparing plans and specifications, attending site inspections, or obtaining foundations data.

This may mean that the builder needs to spend a significant amount of money before the building contract is entered into, only for the owner to later withdraw interest from the project. 

Therefore, to safeguard against the risk of not getting paid for the preliminary work, it is recommended that you first enter into a separate written agreement with the owner, before entering the construction contract. 

When to use a preliminary agreement?

You can use a preliminary agreement to complete work that needs to be undertaken before a domestic building contract is entered into. This could include works such as:

  • Preparing plans and specifications if the value of that work in less than $10,000
  • Obtaining planning approval
  • Obtaining foundations data (soil test, engineering footings design etc)
  • Design work by an architect or draftsperson

What should I include in a preliminary agreement?

Ensure that the obligations of both you and the owner are clearly set out including:

  • What is the scope of the preliminary works?
  • When do the preliminary works need to be completed by?
  • What happens if the agreement is terminated?

HIA has a preliminary agreement available for purchase through Contracts Online that sets out all the terms for you. 

Remember - there are still some rules that apply when using a preliminary agreement!

Deposits limits: Under a preliminary agreement you must not demand or receive a deposit of more that 5% for work over $20,000, or 10% for work under $20,000.

Domestic building work: Preparing plans and specifications is considered domestic building work. This means that if the amount for this work is more than $10,000 then you will not be able to use a preliminary agreement and you will instead need to use a major domestic building contract.

To find out more, contact HIA's Workplace Services team

Email us

Share with your network:

More articles on:

{{ tag.label }} {{ tag.label }} $vuetify.icons.faTimes
Find guides, how-tos, resources and more

Managing your business


 

Can’t find what you need, check out other resources that might be closer to the mark.

Explore resources