Although it’s been well over a year that the QBCC introduced reforms to regulate construction work in Queensland, the information is still filtering through to builders and tradies.

Let me tell you a quick story…. I was helping a friend the other day to create a digital quote document for a job he was asked to quote for a private potential client. It was a domestic building job to do some renovations on a house. The sum he quoted was just over $10K, so not too big and not too small.

Tradies and builders all know too well, how much time it takes to work out a decent quote that’s fair and competitive. You don’t want to spend more time than necessary on preparing the paperwork to get a job. Then we got talking about contracts and I mentioned to him that he would need one. He wasn’t at all sure whether he needed one, given the size of the job. So I helped him find the relevant documents online, so that he doesn’t get caught out by requirements he’s not aware of.

That’s why I thought it might be worth taking a closer look and write a blog about this topic to spread the word. Below is an extract from a QBCC publication called Protecting Your Payment Rights. If you don’t meet the QBCC requirements you commit an offence and can be prosecuted or receive demerit points.

About Contracts in General

It is recommended that you use a written contract for any building work. However it is not uncommon in the building and construction industry for agreements for work or services to be made verbally and with a handshake.

This is usually where a dispute arises because ‘verbal contracts’ make it difficult for you to prove what was agreed to and your entitlement to be paid.

A written contract should:

• Outline the agreement clearly from the start
• Help protect your rights to payment and reduce the risk of non-payment, disputes and conflict.

Details to include in your contract that may assist should a payment dispute arise:

• Have the name, contact details including licence numbers of both/all parties
• List the site address and provide a description of the work that is to be carried out
• List a start date and when the work is to be completed by Specify how much is to be paid for the work
• Detail timing of the payments such as how often a reference date will occur (if not listed the BIF Act default will apply)
• Other payment terms such as retentions and length of defects liability period (if not listed the defects liability period will default to 12 months as per the BIF Act)

Contracts between Contractors and Subcontractors

If you spend a little time preparing and reading over a contract, you could save yourself thousands of dollars and heartache later on:

• Read the fine print carefully don’t be afraid to seek legal advice before signing.
• Make sure that you confirm all variations in writing as soon as possible before work begins on them. Verbal agreements and variations made should be confirmed in writing as soon as possible.Avoid verbal contracts. Keep copies of emails, quotes and specifications, even notes about the discussions you have had.

We recommend that written contracts are used for the following building work:

• head contracts;
• subcontracts;
• sub-subcontracts;
• subcontracts for domestic building work; and
• all contracts for commercial building work between developers, builders and subcontractors.

This also applies to contracts for building work between a contractor and an owner builder permit holder. Different requirements apply to contracts that are made directly with homeowners for domestic building work. If you don’t put a contract in writing, or you enter into a contract that doesn’t contain the requirements stated in the QBCC Act, you commit an offence. The QBCC may prosecute or take disciplinary action and you could accrue demerit points.

Regardless of who is paying your contract, you also need to have your bookkeeping systems in good shape. Are you confident that you can produce accurate quarterly reports to meet the Minimum Financial Requirements (MFR) to the QBCC? If you have any doubts, contact us for a FREE QBCC Compliance Check.