Contract Procedures

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1. Written Contract
     It's mandatory to have a written contract for any residential building work exceeding $5,000 in NSW. For renovations over $30,000, this requirement is even more critical.
     The contract should be comprehensive and include details such as the scope of work, timelines, costs, payment schedule, variations process, dispute resolution mechanisms, and warranties.
     Ensure that the contract complies with the Home Building Act 1989 and the Home Building Regulation 2014.

2. Licensed Builder
     Only engage a licensed builder to undertake the renovation work. Check the builder's license details and ensure they hold the appropriate license for the type of work being carried out.

3. Consumer Protections
     The contract must adhere to consumer protection laws, including the Australian Consumer Law (ACL). This includes guarantees of acceptable quality, fitness for purpose, and compliance with any descriptions or samples provided.

4. Deposit and Progress Payments:
      Specify the deposit amount (not exceeding 10% of the contract price) and outline the schedule for progress payments linked to specific milestones or stages of the renovation project.
      Ensure that the deposit and progress payments are protected under the Home Building Compensation Fund (HBCF) if the contract price exceeds $20,000.

5. Cooling-off Period
     If the contract is signed off-site (e.g., in the client's home), provide a 5-day cooling-off period during which the client can cancel the contract without penalty.

6. Documentation and Records:
     Maintain detailed records of all contract-related documents, including the signed contract, receipts, variations, and correspondence with the client.

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Insurance Procedures

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1. Home Building Compensation Fund (HBCF)
     If the total contract price exceeds $20,000, it's a legal requirement to have insurance under the HBCF in NSW. This insurance protects homeowners against financial loss if the builder fails to complete the work or becomes insolvent.
     The insurance premium is typically included in the contract price and paid by the builder.

2. Public Liability Insurance
     Builders should also have public liability insurance to cover any damage or injury that occurs during the renovation project. Ensure that the insurance coverage is adequate for the scope of work being undertaken.
3. Certificate of Currency
     Before commencing work, ensure that the builder provides a certificate of currency for all relevant insurances. This document confirms that the insurance policies are current and valid.

By following these contract and insurance procedures, both builders and homeowners can ensure legal compliance, financial protection, and peace of mind throughout the renovation process in NSW. It's advisable to seek legal advice or consult with relevant authorities if you have any questions or concerns regarding these procedures.