Effective from 1 August 2017 there will be a number of changes to regulations under the Domestic Building Contracts Act 1995 (Vic) (Act).
Major Domestic Building Contracts
Major domestic building contract is now defined as a domestic building contract where the contract sum is more than $10,000 (previously $5,000).1
If the contract sum for preliminary work is less than $10,000, the parties no longer need to enter into a major domestic building contract. However, the parties should still document their agreement in writing. That agreement must comply with the requirements in Part 2 of the Act including notice of escalation clauses and limits on the amount of deposit.
If the contract sum for preliminary work is more than $10,000, the parties must still enter into a major domestic building contract. However, the major domestic building contract does not need to incorporate plans and specifications which contain enough information to enable the obtaining of a building permit.2
Cost Plus Contracts
Cost plus contracts for domestic building work are now only permitted:
If parties enter into a cost plus contract in any other circumstances:
1 Regulation 6 of the Domestic Building Contracts Regulations 2017 (Vic) (Regulations).
2 Regulation 11(2) of the Regulations.
3 Regulation 10(b) of the Regulations.