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What to Consider in Contracts

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Tips on using Contracts when hiring a trade professional.

When hiring a tradesman, there are a number of things you must check, or at least consider such as price, licensing, safety, experience and a contract if there is going to be one.
Try to educate yourself on the process of the project involved so you can ask relevant questions and not be led down the wrong path. Knowing how much the materials for the job should cost, time frame for completion of the job and any possible complications or consequences are good areas to research and think about so when you’re talking to a tradesman to quote the job, they will believe you know what you are talking about.

The first thing to do is check the tradesman is licensed and that their business details are correct!
Ask the tradesman for their licence details or you may find them on tradescheck.com.au if the tradesman wants to promote that their business as licensed.

The Trades Check website also allows you to find licensed tradesmen in their trade directory.

If any details are wrong or don’t match up with other details, you know straight away this person is untrustworthy. Make sure they are representing the company they advertise for as well and all quotes are on a letterhead and clear.
Request proof of insurance such as public liability. This is very important if someone gets hurt on site from actions by your tradesman. If you are unsure talk to the insurance broker of the tradesman and ensure there is enough cover especially on larger projects.

When getting a quote, ensure all information given to each tradesman is the same so you can get a quote for the same scope of works (apples for apples). Pick a tradesman or builder who you feel comfortable with, these people will be inside your home and will have access to areas you don’t normally allow strangers. So a feeling of trust is a big thing.
Finalise the contract if there is going to be one and detail the work to be done before signing. Ensure you fully understand what you wish to achieve and fully understand what is written on the contract. You don’t want to hear the saying "oh that’s not on the contract" when you clearly remembering asking for it to be done!
Remember what is written and what is not written will stand up strongly in court if things unfortunately get that far. Checking the Building Glossary of Terms on tradescheck.com.au for clarification on building terminology when discussing the scope of works. The contract should have things such as:

  • Company letterhead with all details such as address, licences and contact numbers
  • Address of where work is to be performed
  • Date of contract signing
  • Projected date of completion
  • Detailed description of works to be performed
  • All prices involved and total amounts with GST included
  • Payment schedule
  • Termination clause
  • Home owner warranties on work and guarantees
  • Clearly states who is responsible for what permits, consents from council and who will pay for them

There can never be too much information written on a contract to ensure everything is covered. When making payment to the trade, make sure it is written out to the company name in which the ABN is registered to and not the individual and always ask for a receipt whenever a payment is made. Your tradesman is only entitled to progress payments for work done however the tradesman may ask for a deposit for 3rd party expenses such as council approval costs etc. for the project and pre ordering of expensive materials. Besides these costs it is against the law for the tradesman to receive a deposit of more than $1,000.00 on any domestic work with a contract less than $20,000.00 or 5% of the contract with a price over $20,000.00.

Do not make final payment until you are completely happy with all works done. Ensure you receive the COC (Certificate of Compliance) from the electrician, gas fitter and plumber (if any used). Obtain all appliance warranties and certificates in case of breakage. Lastly document all changes to the contract and work out a cost before the extra work is done, making sure it is signed by both parties to remove any hidden nasties at the end.

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