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Welcome to this month's edition, where we hope to guide you through the sometimes daunting task of signing a Building Contract (in NSW) and ensuring you know what you are covered for in case of...

Are you about to undertake a project to your home that exceeds $20,000?  It doesn't take long for most home building and/or home renovations to hit this mark - building supplies, time and skill, rubbish removal and so on.   

Are you Covered - Builder's Home Owner's Warranty Insurance for New South Wales (NSW) ?

For contracts exceeding $20,000 (including the cost of any materials supplied by the contractor), the builder or tradesperson must give a certificate of home warranty insurance to the home owner, before taking any money (including deposit) on the contract, and before starting any work.   Home Warranty Insurance requirements also apply to work carried out for owner-builders and tradespeople. NSW Fair Trading consumer Building Guide

I've signed a NSW Building Contract, is there a cooling-off period?

Always!  And your rights for cancelling a contract, specifically a Building Contract in NSW, is if -

  1. you change your mind, but you must do this within five (5) business days.  Remember, your 5-day period does not include NSW public holidays,or the dates 27th - 31st December (inclusive) from the date you signed your contract. 

    A cooling-off period for residential building contracts was introduced into the Home Building Act 1989 to allow time for consumers to have their legal representatives review the contract and, if necessary, cancel the contract if it is deemed to be unfair or unsuitable.

  2. you  never received a copy of the contract you signed, this too falls under the provisions of the 5-day cooling off period and may allow you to cancel your contract upon written notice to the contractor.

  3. your contract does not state the cooling-off period, which must by law.  This is seen as a misrepresentation and may give cause to cancel the contract within 7 days of becoming aware. 

  4. you both mutally agree.

However, you may be liabile for any costs that the builder / tradesman has incurred on your project - that you will be the beneficiary of - up until the contract is cancelled.

A must to remember:

 You only have cooling-off rights to cancel your contract if the cost of labour and materials exceeds $20,000.

We hope you found this information helpful.   If you have any further questions, please don’t hesitate to drop us a comment below, or on our Facebook page, or email me at




  Tags:  | Comments (2)

Comments (2)

  1. Scott Baldwin:
    Jul 18, 2013 at 03:24 AM

    Hi Brian,
    What can a company charge me if I canceled a bathroom renovation within this 5 day cooling off period.


  2. Brian Babbidge:
    Jul 18, 2013 at 10:48 AM

    Hi Scott,

    Thank you so much for reading our post, I do hope you found it informative.

    In answer to your question above, does your bathroom renovations contract for labour and materials exceed $20,000? If it does exceed this value, then the cooling off period will apply.

    Also, I recommend you review your contract to make sure that it in fact makes reference to the cooling-off period. By law, this clause must be included. If the clause is missing from your contract, then this may also give you rights to cancel the contract for this project within 7 days.

    Bear in mind, if your builder and/or tradesmen have incurred costs pertaining to your project of which you are the beneficiary of, then you may be liable for these costs up until the contract is cancelled.

    Let me know if I can be of assistance further.


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