Should the builder be giving me a cost plus contract for a new home build? Homeowner FAQ


Homeowners - Should the builder be giving me a cost plus contract for a new home build? - call us on 07 3128 0120 or email at homeowners@arbuildinglaw.com.au - www.homeowners.arbuildinglaw.com.au

As a homeowner, should the builder be giving me a cost plus contract for a new home build?

There would need to be a very good reason why a cost plus contract should be used for a new build (for example if the design requires new architectural techniques that are rare or the builder has not used before). In all other normal circumstances, cost plus contracts should not be used for new builds.

For a new build, most homeowners need certainty of price so that you have enough funds or can obtain enough funds for the build. A cost plus contract does not provide any certainty and allows for you, the homeowner, to bear a disproportionate risk.

To find out more here in Homeowner FAQ about:

  • Provisional sums, search for “what is a provisional sum”;

  • Prime cost items, search for “what is a prime cost item”;

  • Cost plus contracts, search for “what is a cost plus contract”.


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