Home Building Contract Requirements in Western Australia

What it is

The Home Building Contracts Act 1991 (WA) governs contracts between a builder and an owner for home building work. It is short, old and does less than its eastern-state equivalents. What it does do, it does through Part 2, and the obligations all sit on the builder.

The value band that switches the Act on

Section 3(1) defines a home building work contract by exclusion. A contract is outside the Act if the amount stated as payable for the work is at or below a prescribed floor, or at or above a prescribed ceiling. Regulation 2A of the Home Building Contracts Regulations 1992 prescribes $7,500 and $500,000.

Building and Energy describes the band as fixed-cost contracts between $7,500 and $500,000, and confirms the protections apply whether or not the builder is registered. Section 3(1) also carves cost plus contracts out of the definition, so a cost plus job gets only section 14 and Part 3A.

The ceiling is the trap. A new home over $500,000 is a normal Perth build in 2026 and it sits outside the Act. Nothing in Part 2 reaches it.

Writing, and the Notice that comes first

Section 4(1) requires the contract to be in writing setting out all of the terms, conditions and provisions of the contract, to show the date of the contract, and to be signed by the builder and the owner or their agents. Section 4(2) and 4(3) require that the owner be given a prescribed notice explaining the relevant provisions of the Act before the owner signs. Regulation 3 prescribes that notice as the "Notice for the Home Owner" set out in Schedule 1 to the Regulations.

Section 4(4) makes it the builder's job to ensure both are done, with a penalty of $2,000. Section 4(5) gives the owner a right to terminate under section 19 if the writing requirements are not met.

Section 5(1) then requires the owner be given a copy of the signed contract as soon as is reasonably practicable after signing and before the home building work is commenced. The penalty is $500, but section 5(3) escalates it: if the owner asks in writing for a copy and the builder does not supply it within 10 working days, the penalty is $10,000.

The other mandatory terms

• Section 12: prime cost items and provisional sums must not be understated. The estimate must be at or above the lowest amount the item could reasonably cost.
• Section 13: rise-and-fall clauses are prohibited and void, subject to narrow exceptions for statutory impositions, tax and charge increases, and commencement delayed beyond 45 working days through no fault of the builder.
• Section 14: a cost plus contract must be headed "cost plus contract" and must contain an acknowledgment that the Act, apart from section 14 and Part 3A, does not apply to it.
• Sections 15 and 15A: no unconscionable, harsh or oppressive conduct by the builder, and no misleading or deceptive conduct by either party.
• Section 26(2): a clause restricting inspection is void. Section 28: contracting out is prohibited.

Home indemnity insurance sits in Part 3A on its own trigger. Building and Energy states it is required for all building work requiring a building permit and valued at more than $20,000, the amount prescribed by regulation 7. The builder must give the owner the certificate, and the owner should make no payment until cover is in place. Cover runs to $40,000 for loss of deposit and $200,000 for incomplete or defective work.

There is no cooling-off period

Western Australia has no statutory cooling-off period for home building contracts. The Act has no rescission window, and the prescribed Notice for the Home Owner, which exists specifically to tell owners what the Act gives them, does not mention one. Cooling-off is listed as a topic for consideration in the current review of Western Australia's home building contract laws, which is what you would expect of a right that does not yet exist.

Anyone arriving from Queensland, Victoria, South Australia or the ACT will assume otherwise. In Western Australia, signature is the commitment. The only adjacent right is the Australian Consumer Law cooling-off period of 10 business days, and that applies to unsolicited consumer agreements, not to a contract the owner sought out.

What non-compliance actually does

Less than most people expect. Section 27(1) provides that a contract or a provision of a contract is not illegal, void or unenforceable only because a requirement of the Act is not complied with, except as provided in sections 13(2) or 26(2) or by an order under section 41(3)(a) of the Building Services (Complaint Resolution and Administration) Act 2011.

So the sanctions are the penalties, the infringement notices under regulation 8, the owner's termination right under section 19, and a complaint to the Building Commissioner within three years of the contract date or the cause of action arising.