According to the ACT Government’s guidance on hiring a builder, figures checked 1 October 2026, ACT homeowners should obtain at least 3 quotes from different builders before signing and compare more than the headline price: the cheapest quote is not always the best value. The same guidance strongly recommends a written contract even though ACT legislation does not require one, and notes that building contracts have no mandatory cooling-off period. Key figures in that guidance are an initial deposit usually up to 10% of the total contract price under industry practice, a maximum $10,000 claim under project insurance if the work is incomplete, and statutory warranties for residential building work valued over $12,000.
Why should I obtain 3 quotes, and what should I compare?
Three quotes give you a broader view of price, quality and contract terms. They also help expose differences that may not be obvious from the final number alone.
Give every builder the same plans, specifications and list of important features. Otherwise, a lower quote may cover less work or allow different products. Compare these elements:
| Quote element | What to check across the quotes |
|---|---|
| Scope | The detailed work description, attached plans and specifications |
| Inclusions | Named products and features, including smaller items that matter to you |
| Price | The contract price, or a clear explanation of unknown costs and costs subject to change |
| Timeframes | Start, completion and final handover dates, including allowance for approvals |
| Payments | Deposit, progress-payment stages and the amount due at each stage |
| Changes | Variation procedures, extensions of time and any builder’s margin |
| Disputes | Dispute resolution and termination procedures |
| Protections | Licence details, insurance, warranties and responsibility for approvals |
Get as much information as possible with each quote, then place the documents side by side. A quote is easier to compare when every builder is pricing the same outcome.
How do I check past work and complete due diligence?
Past work helps indicate whether a builder can provide the level of service you expect. The ACT guidance suggests asking potential builders for details of similar past work and recent clients.
Use that information alongside formal checks:
| Check | What to consider |
|---|---|
| Similar work | Whether the builder has completed work comparable to your project |
| Recent clients | Details that help assess the builder’s expected level of service |
| Licensing | The correct licence class where the work requires a licensed builder |
| Company history | The history and structure of the builder or building company |
| Company searches | Any company searches that may be appropriate for the builder |
| Compliance | Whether the disciplinary register records action against the builder or its directors |
| Insurance | The policies held by the builder and any project-specific requirements |
Past work does not replace these checks. Make sure you use a licensed and insured builder where required.
How do I set a budget and prepare for extra costs?
Set your budget before comparing quotes and try to stick to it. The guidance also notes that higher quality generally comes at a higher cost, so decide which standards and inclusions matter most rather than comparing price alone.
| Payment or cost | What to check |
|---|---|
| Budget | Whether the quote fits the overall project budget, not just the initial payment |
| Contingency funds | Whether you have set aside extra money for unforeseen additional costs |
| Deposit | The initial payment required to start work |
| Progress payments | Payments made as construction progresses |
| Financed projects | Any lender requirements for releasing funds for progress payments |
The cited guidance recommends extra funds but does not prescribe a fixed contingency amount.
There is no limit on the initial deposit for residential building work in the ACT. Industry practice is usually a deposit of up to 10% of the total contract price, paid in advance as security for the builder and towards initial material costs. That is industry practice, not a statutory cap.
The maximum amount claimable under the project insurance is currently $10,000 if the work is not completed. Take that limit into account when negotiating the deposit and check the contract and insurance documents carefully.
For progress payments, the contract should identify each stage of work and the amount payable after that stage. Apart from the initial deposit, good practice is for progress payments to cover only work already completed, so check that this is stated. If a lender is financing the project, understand its requirements for releasing progress-payment funds.
For work over $12,000 on some residential buildings, the builder must have residential building work insurance or a fidelity fund certificate for the project before work commences. Obtain a copy and check that the contract allows fair termination if the builder cannot obtain the required insurance within the prescribed time.
Homeowners warranty insurance is different: it covers only up to $10,000 for deposits and is not residential building work insurance under the Building Act 2004.
Is a written building contract required in the ACT?
No. ACT legislation does not require a written contract for residential building work, but the ACT Government strongly recommends one.
A signed contract is binding between the homeowner and builder. It records their rights and responsibilities and can clarify:
- the construction of the new home or renovation;
- costs, timeframes and expectations;
- each party’s rights and obligations;
- variations and extensions of time;
- payment stages;
- practical completion and defects;
- termination; and
- dispute resolution.
A clear contract may help avoid disputes about the work or the process, although it cannot prevent every disagreement.
The ACT also has no mandatory cooling-off period for building contracts. Be ready to enter the contract before signing, because changing your mind after signing may trigger a contractual penalty.
A builder may use a standard residential contract from an industry association or have a lawyer prepare one. If the contract contains special conditions, read them carefully and check that the standard terms provide the protections you need.
What should the contract identify before signing?
A residential building contract should clearly deal with the following:
| Topic | Details to include |
|---|---|
| Parties and site | Exact names of the homeowner and builder, the work address, contract date and both signatures |
| Work | A detailed description, with the building plans and specifications attached |
| Important features | The features that matter most to the homeowner |
| Inclusions | Products and finishes that cannot be changed without your agreement |
| Approvals | Who is responsible for obtaining relevant approvals, including a development approval if required |
| Price | The contract price if known, or clear explanations of unknown costs and costs subject to change |
| Payments | The deposit and a progress-payment schedule describing each stage and amount |
| Credentials | The builder’s licence details and any insurance policies held |
| Programme | Start and completion dates, final handover and allowance for obtaining approvals |
| Changes and disputes | Procedures for variations, extensions of time, termination and dispute resolution |
List inclusions even when they seem minor. They might include particular tapware, cornices, paint or a specific colour. If requirements are not specified, the contract may allow the builder to change room dimensions or substitute products that are not acceptable to you.
Decide what you want and need before signing. The guidance says this may avoid extra costs for changing the contract while construction is underway.
If building approval is required, an independent building certifier must consider the application and inspect the work at certain stages. The guidance places responsibility for appointing the certifier on the landowner.
A residential building contract must not give the builder the right to appoint the certifier or act as the homeowner’s agent when dealing with the certifier. You may agree for the builder or another person to appoint the certifier, but this must be covered by a separate written agreement.
How should the contract deal with price changes and variations?
The contract should explain how variations will change the plans, specifications, time or costs. It should also cover what happens if changes arise because of:
- changes in local laws;
- errors in plans; or
- changes in the supply of goods.
Always get variations in writing. Most contracts require them to be signed by both the homeowner and builder.
A builder may refuse a requested variation in circumstances prescribed by the contract, so check the refusal procedure before signing. You should understand:
- who can request a variation;
- what written information must accompany it;
- how the price impact is assessed;
- how additional time is granted;
- when the work will proceed; and
- how the variation is recorded.
A builder’s margin is essentially the builder’s fee. The percentage in the contract applies only in specified circumstances, such as variations or termination, and is used to calculate the dollar amount added to other costs. Check the circumstances in which the margin applies rather than assuming it is included in every extra cost.
If you intend to create your own payment schedule, seek legal advice. You should also obtain independent legal advice before adding or changing contract terms.
How should the contract handle dates, delays and completion?
The contract should include a start date, completion date and final building-handover date, with allowance for obtaining relevant approvals. It should also explain how to request an extension of time.
The contractual completion date is intended as a guide and may be subject to change. The ACT guidance says an estimated timeframe protects both the homeowner and builder, but the process for changing dates still needs to be clear.
Contracts generally contain delay-compensation terms that protect the builder. If you want compensation for construction delays, discuss this with the builder and obtain legal advice before entering the contract.
A liquidated damages clause requires the builder to pay an amount for each day the project is late, subject to allowable delays. Depending on the contract, exceptions may include rain days, events outside the builder’s control, or delays caused by the homeowner or people acting on the homeowner’s behalf.
Completion terms also need careful attention:
| Term | What it may mean |
|---|---|
| Lock-up | The building can be effectively secured, but internal and external work may remain |
| Practical completion | The building is complete or nearly complete under the contract, apart from minor work or defect fixing |
| Maintenance or defects liability period | The period and actions required to identify and address defects |
Neither lock-up nor practical completion necessarily means every item of work is finished. Most contracts use practical completion as the finish date, but some do not. Check when the building and contract will be treated as complete, along with what each party must do during the defects period.
How should termination and disputes be handled?
A termination clause should state when the contract may be terminated and what each party must do when that happens. Termination may require the homeowner to pay an amount to the builder, so obtain legal advice if the clause does not provide sufficient protection.
The dispute-resolution clause should provide a simple process and identify the mechanisms available for attempting to resolve an issue. Understand those requirements before signing.
If concerns arise:
- raise them with the builder as soon as possible;
- keep records of complaints and the builder’s responses;
- ask the builder to explain its complaints policy and provide any written policy; and
- keep a record of the project’s progress.
If the contract’s dispute process does not resolve the matter, seek independent legal advice about your contractual rights. Fair Trading at Access Canberra can also provide information and advice about Australian Consumer Law rights on 13 22 81.
What should I do before signing and during the work?
Before signing:
- read every clause and make sure you understand your rights and obligations;
- obtain independent legal advice on uncertain terms or proposed changes;
- seek independent legal and financial advice on the contract;
- check any special conditions carefully;
- understand how variations, delays, termination and disputes will work; and
- make sure you receive a copy of the signed contract as soon as possible.
During construction, request regular builder updates, record progress and keep every variation in writing.
This is general information, not financial or legal advice. Before signing or relying on insurance, check the ACT Government regulator guidance and the Product Disclosure Statement for any relevant policy.
Sources
FAQ
How many builder quotes should ACT homeowners obtain?
The ACT guidance recommends obtaining at least 3 quotes from different builders. The cited page presents this as recommended practice and does not state that three quotes are a statutory quota.
Does the cheapest quote always provide the best value?
No. Compare the same scope, plans, specifications, inclusions, timeframes, payment terms and contract protections. A lower total can still represent less work, different products or less suitable contract terms.
Is a written building contract compulsory in the ACT?
No. ACT legislation does not require one, but the ACT Government strongly recommends a written contract because it records costs, timeframes, rights, responsibilities, variations and dispute procedures.
How much should I pay as an initial deposit?
The ACT has no legal limit on the initial deposit. Industry practice is usually up to 10% of the total contract price, but the maximum claim under project insurance is currently $10,000 if the work is not completed.
What should I do if a builder proposes a variation?
Require the variation in writing and check the proposed change in price, time and any builder’s margin. Follow the contract’s variation procedure and obtain independent legal advice if the terms or cost impact are unclear.
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