Deposit limits changed

Date: 19 September 2011

 From 1 September 2011:

  • if the price stipulated in the contract for the performance of the building work is less than $20 000 – a deposit of up to $1000 is permissible;
  • if the price stipulated in the contract for the performance of the building work is $20 000 or more – a deposit of up to 5% of the contract price is permissible.

In addition to the deposit a builder may still recover preliminary payments for payments made to third parties for engineering, drawing, surveying or other professional services and payment to reimburse the cost of building indemnity insurance or other fee required to be paid under the an Act for work to be performed.

As a result of this positive change the government has amended the Schedule 3 – Form 1 – Notice Under Section 28 (1) (f) of Building Work Contractors Act 1995 that appears in the back of HIA contract.
As such, from the 1 September 2001, the extra contract term below should be included when entering into any of the following HIA contracts:

  • HIA Plain Language Building Contract for New Homes
  • HIA Plain Language Building Contract for Alterations & Additions
  • HIA Plain Language Cost Plus Building Contract
  • HIA Plain Language Building Contract for Kit and Transportable Homes
  • HIA Plain Language Building Contract for Small Works

Each party to the contract should initial each page of the new Form 1 and affix the new Form 1 to the contract.

Extra Contract Term

For the purposes of this contract the following Schedule 3 – Form 1 – Notice Under Section 28 (1) (f) of Building Work Contractors Act 1995 shall apply in substitution of the counterpart set out in this contract but in all other respect the remainder of the clauses contained in this contract shall continue to apply.