HIA domestic building contracts have a sneaky addition - get a home building contract review

Updated 29/10/25 | First Published 20/09/17 | Author Fionna C Aitchison Reid

Reading between the lines - when a clause that on its face seems harmless, can have some dire consequences

I originally wrote about this clause in September 2017. In 2017, I referred to this clause as “a sneaky new addition” to one specific HIA contract product. Now over 8 years later, it is part of all HIA standard form domestic building contracts.

Now before, we get started, I think it is important to point out this clause applies equally to homeowners and builders who enter the contract. Therefore, this clause is likely to be a fair term, from an Australian Consumer Law perspective.

However, sometimes a fair clause can still have more impact on one party than the other party, because of actual on the ground circumstances and the legal framework.

The clause states:

“A party is not entitled to end this contract under this Clause if, within 5 working days of receiving the notice to remedy breach, the party in substantial breach refers the matter to the Queensland Building and Construction Commission, and/or the Queensland Civil and Administrative Tribunal under Clause 37.”

On the face of it, this clause seems pretty harmless and possibly even helpful. Isn’t it a good idea to get the Queensland Building and Construction Commission (the Commission) or the Queensland Civil and Administrative Tribunal (the Tribunal) involved before the parties terminate the contract?

What does the clause do?

The clause completely prevents termination of the contract if the other party refers the matter to the Commission or the Tribunal.

To give you some context, if the matter is referred to:

• The Commission - it would fall into the Early Dispute Resolution Service. This service involves QBCC inspectors contacting both parties and attempting to “facilitate” an agreement. Most often one or more of the parties is not willing to take part and the matter is closed.

• The Tribunal - it will require a domestic building dispute application to be filed. To access the Tribunal, the dispute must first go through the Commission’s dispute resolution process. Unless the dispute is $10,000 or less, the matter will likely take at least 2 years to get to hearing.

Why would this be an issue for homeowners?

Homeowners are more likely to want to terminate the contract.

If the homeowner wants to rely on statutory home warranty insurance assistance, the homeowner must:

• Validly terminate the contract on the default of the contractor (section 4, Schedule 6, Queensland Building and Construction Commission Regulations 2018); and

• Terminate the contract and make their incomplete work complaint to the Commission within 2 years from the date that they entered into the contract with the builder (section 5(1)(b), Schedule 6, Queensland Building and Construction Commission Regulations 2018).

So by stopping or delaying the homeowner from terminating the contract, the clause could potentially affect the homeowner’s ability to claim for statutory home warranty insurance (which is valued up to $200,000).

But why should the builder care if the homeowner gets insurance or not?

Although from the homeowner’s perspective, it’s the Commission that pays the statutory home warranty insurance, the Commission can and does seek repayment from the builder.

Section 71 of the Queensland Building and Construction Commission Act 1991 empowers the Commission to recover from the builder as a debt due any amount the Commission pays as statutory home warranty insurance.

In addition, the Commission then publishes how much was paid by the Commission in statutory home warranty insurance on the builder’s online QBCC record.

So what can you do? Get a home building contract review

Simple - get a home building contract review from a construction lawyer before entering into any home building contract (domestic building contract) in Queensland to make you aware of sneaky clauses that may exist in your home building contract.

Once you are aware of these clauses you can negotiate the home building contract with the builder and either amend or delete clauses to make them reasonable for both parties.

If the builder won’t negotiate, you can then decide whether you would like to go ahead with the contract or walk away and find a more suitable builder. Even if you decide to go ahead with the home building contract, you are far more aware of the possible risks in advance.

Simply being aware of your risks usually leads to a less stressful and more productive home build.

Contact us

Worried about a domestic building contract for your home build? At Aitchison Reid, we deal with domestic home building contracts on a daily basis. We understand the legislation, the industry contracts and the policy behind them. Who better to give advice on perhaps one of your biggest investments – your home?

We provide three different contract review products, which you can consider, book and purchase online on the book now link below.

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