The ACT Government’s City and Environment Directorate guidance on hiring a builder recommends obtaining at least 3 quotes from different builders, but warns that the cheapest quote is not always the best value (figures checked 1 October 2026). Compare the same plans, specifications and inclusions, attach them to the contract, and document variations in writing; most contracts require variations to be signed by both parties.
Why does the cheapest of 3 quotes not always mean best value?
A lower price is only useful when each builder is pricing the same work. If one quote includes higher-quality tapware, a particular cornice or a specified paint colour while another leaves those items open, the headline numbers may not be comparable.
The ACT guidance also notes that higher quality generally costs more. A cheaper quote may therefore reflect different products, allowances or exclusions rather than better value.
Use the same comparison across all quotes:
| What to compare | What to check |
|---|---|
| Scope of work | The same plans, specifications, room dimensions and detailed description of work |
| Inclusions | The agreed products, finishes, fittings and quality, including smaller items |
| Price structure | The contract price, exclusions, and any costs that are unknown or subject to change |
| Programme | Start and completion dates, handover date and allowance for relevant approvals |
| Changes | How variations, extensions of time and cost changes will be handled |
| Payments | The initial deposit and the stages and amounts for progress payments |
| Credentials and protection | The correct builder licence class where required, insurance and contract protections |
Ask potential builders for details of similar past work and recent clients. You can also undertake company searches and check the disciplinary register for action against the builder or its directors.
Set a budget and stick to it, while allowing for unforeseen costs. Before accepting a quote, check that its scope and product level fit both—not just one is the lowest number on the page.
Is a written building contract required in the ACT?
ACT legislation does not require a written contract for residential building work, but the ACT Government strongly recommends one. A contract is binding between the homeowner and builder and records both parties’ rights and responsibilities, including the expected costs, timeframes and work.
There is also no mandatory cooling-off period for building contracts in the ACT. Be ready before signing because changing your mind may attract a contractual penalty.
Before signature, check that the contract clearly covers:
- The exact names of the homeowner and builder, the work address, date and both signatures.
- The builder’s licence details and any insurance policies held.
- A detailed description of the work, with the plans and specifications attached.
- The contract price, or clear explanations of costs that are unknown or subject to change.
- A progress payment schedule describing each work stage and the amount payable.
- Start and completion dates, including allowances for obtaining relevant approvals.
- Who is responsible for obtaining other required approvals.
- The process for variations and extensions of time.
- Practical completion, the defects liability period and each party’s responsibilities.
- Dispute resolution, termination and the consequences of termination.
If building approval is required, the landowner must appoint the independent building certifier. The residential building contract must not give the builder the right to appoint the certifier or act as the homeowner’s agent when dealing with it. Any agreement allowing another person to appoint the certifier must be in a separate written agreement.
A builder may use an industry-association standard residential contract or have one drafted by a lawyer. Read any special conditions carefully and make sure the contract provides the protections you need.
How do attached plans and inclusions prevent substitutions?
The contract needs a clear scope against which the work can be checked. The ACT guidance recommends attaching the building plans and identifying the features most important to you.
Specify inclusions even when they are small. Examples include:
- Higher-quality tapware.
- A particular cornice.
- A specified paint or paint colour.
- Other agreed fittings, finishes and materials.
- Room dimensions and layouts that must remain unchanged.
An inclusion specified in this way cannot be changed without your agreement. If requirements are left unspecified, the contract may allow the builder to change room dimensions or substitute products that are unacceptable to you.
Tell the builder what you want and need, then settle important items before signing. Deciding early may avoid extra contract-change costs during construction.
How should contract variations be recorded?
The contract should explain how changes to plans, specifications, extensions of time and costs will be processed. It should also cover variations arising from matters such as changes in local laws, errors in plans or changes in the supply of goods.
Use a straightforward written process:
- Follow the variation procedure set out in the contract.
- Describe the requested or agreed change in writing.
- Record its effect on the scope, cost and programme.
- Obtain the required signatures. Most contracts require variations to be written and signed by both parties.
- Keep the variation with the signed contract and other project records.
Always obtain variations in writing. A variation can change the final cost, and the builder may refuse a request in circumstances prescribed by the contract.
The ACT Government’s worked example shows how costs can accumulate:
| Worked-example item | Amount or outcome |
|---|---|
| Additional bathroom-fitting goods | $1,500 |
| Delay | 3 days |
| Builder’s margin in that contract | 18 per cent |
| Margin added to the goods cost | $270 |
| Total bathroom-fitting cost | $1,770 |
Under that example, the builder could add the goods cost and margin to the next progress payment. The 18 per cent margin belongs to the example contract and is not presented as a standard ACT rate.
How do deposits and insurance affect the value of a quote?
The total contract price is only one part of the financial commitment. Check the payment and insurance terms as carefully as the inclusions.
| Item | ACT guidance |
|---|---|
| Initial deposit | There is no legal limit in the ACT, although industry practice is usually up to 10% of the total contract price, paid in advance for builder security and initial material costs |
| Project insurance if the work is not completed | The maximum amount claimable under the project insurance described in the guidance is currently $10,000 |
| Progress payments | The contract should identify the work stages and amounts. Apart from the initial deposit, good practice is for progress payments to cover only work already completed, and the contract should say so |
| Statutory warranties | Residential building work over $12,000 carries statutory warranties even if the contract does not state them |
| Required project cover | 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 of the residential building work insurance policy or fidelity fund certificate. Check that the contract allows fair termination if the builder cannot obtain required insurance within the prescribed time.
Make sure you can pay the deposit and progress payments when they fall due. If a lender is financing the project, understand the lender’s requirements for releasing funds.
When should I seek advice before signing?
Seek independent legal advice if you are unsure about a clause, want to add or change terms, or need advice on whether the termination provisions give you sufficient protection. Independent financial advice can also help with financing and payment arrangements.
This is general information, not financial or legal advice. Before signing, check the current ACT Government regulator page, read the complete contract and any special conditions, and check the relevant insurance policy’s PDS. Raise concerns as soon as possible and keep records of complaints and the builder’s responses.
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FAQ
Is a written building contract compulsory in the ACT?
No. ACT legislation does not require one for residential building work, but the ACT Government strongly recommends a written contract because it records the parties’ rights, responsibilities, costs, timeframes and expectations.
Does getting 3 quotes mean I should choose the cheapest builder?
No. The quotes must cover comparable plans, specifications and inclusions. The ACT Government advises obtaining at least 3 quotes but warns that the cheapest is not always the best value.
What should be included in a written variation?
Record the change to the work and its effect on plans, specifications, cost and time. Most contracts require variations to be signed by both parties, and the builder may refuse a request in circumstances prescribed by the contract.
What should I do if a builder asks for an extra cost during construction?
Check the contract’s variation procedure and obtain the change in writing before treating it as agreed. Raise concerns promptly, keep the builder’s response, and seek independent legal advice if the contractual process does not resolve the issue.