Knockdown Rebuild Contract Checklist — 27 Clauses That Decide Your Outcome
I've read more building contracts than I can count. Most clients sign them after a 90-minute meeting and a cup of tea. That's how a $700k project becomes a $830k project with a six-month delay and a relationship in tatters.
The contract is the entire game. Below are the 27 clauses that actually matter on a Sydney knockdown rebuild — what to look for, what to push back on, and where the standard HIA/MBA forms leave you exposed. Buildana uses the HIA NSW Residential Building Contract as our base. Most reputable builders do. The form is fine. The variations are where you live or die.
Clauses 1–7 — Price, Scope and Inclusions
1. Fixed price vs cost-plus — fixed price for residential KDR, full stop. Cost-plus is for renovations of unknowns, not new builds.
2. Inclusions schedule — must be page-numbered and itemised. 'Standard inclusions' is not a clause, it's a future variation.
3. PC (Prime Cost) and PS (Provisional Sum) items — every PC/PS allowance must have a dollar value. PC for taps, PS for tiling labour. If the contract says 'PC: client to nominate', insist on a placeholder dollar figure.
4. Site costs allowance — separate line. $0 site costs is not a real number. Insist on $15k–$30k allowance with reconciliation rules.
5. Demolition included or excluded — if excluded, get a separate fixed-price demo contract.
6. Excavation rock clause — what happens if rippable rock is found below 600mm. Rate per cubic metre must be disclosed.
7. Soil class assumption — usually Class M (moderately reactive). If actual soil is H1, H2, P, you pay the upgrade. Get the slab system priced for each class upfront.
Clauses 8–14 — Time, Delays and Liquidated Damages
8. Construction commencement date — defined trigger event (CC issue + site possession), not 'within reason of'.
9. Construction period — number of working days, not 'approximately X months'. 220 working days = ~10.5 months.
10. Liquidated damages clause — typically $200–$500/week. Push for $500/week minimum. This is your only enforceable lever for delay.
11. Extension of time provisions — list every grounds for EOT (weather, variations, latent conditions). Require written notice within 10 business days.
12. Notice of practical completion — must trigger inspection within 7 days, not 'a reasonable time'.
13. Defects liability period — minimum 13 weeks under HIA standard; push for 26 weeks.
14. Statutory warranties — Home Building Compensation Fund (HBCF) certificate must be issued before any deposit. No HBCF certificate, no deposit. Non-negotiable.
Clauses 15–21 — Variations and Payments
15. Variation procedure — every variation in writing, both parties signed, BEFORE work proceeds. Verbal variations are how budgets explode.
16. Variation pricing transparency — builder must disclose subbie quote + margin %. Standard is 15%–20% builder margin on variations.
17. Progress payment schedule — should match HBCF schedule (deposit 5%, base 10%, frame 15%, lockup 35%, fix 25%, final 10%). Anything front-loaded is a red flag.
18. Deposit cap — maximum 10% under NSW Home Building Act for contracts over $20k. Builders asking for 20% upfront are non-compliant. Walk away.
19. Invoicing trigger — payment due X business days from claim, not from invoice receipt.
20. Right to dispute claim — clearly defined dispute process before withholding payment.
21. Final payment — withhold 5% retention until certifier issues OC and defects punch-list is closed.
Clauses 22–27 — Risk, Insurance and Termination
22. Builder's contract works insurance — builder must hold and provide certificate of currency. Should cover full contract sum + 20%.
23. Public liability insurance — minimum $20m cover, named on policy.
24. HBCF eligibility certificate — already mentioned. Worth saying twice.
25. Termination clauses — both directions. Builder's right to terminate for non-payment, your right to terminate for breach. Cure periods (typically 10 business days written notice).
26. Dispute resolution — escalation through Fair Trading first, then NCAT. Mandatory pre-litigation steps.
27. Assignability — contract is not assignable without written consent. Stops the builder selling your contract to another company mid-build.
Before you sign anything, take the contract to a building lawyer for a 1-hour review. Cost: $400–$700. Saves multiples of that. For our process visit /homes/knockdown-rebuilds or call 0476 300 300 to discuss your project. We share our standard contract before any deposit so you know what you're signing.
