Building Contracts
Parish Wardens are responsible for arranging and negotiating building contracts with contractors and suppliers. Regardless of the value of the proposed works, a written contract is mandatory.
In line with prudent commercial practice, the APT requires that multiple quotations from reputable, certified, and independent tradespeople or consultants will be obtained for all projects. This helps benchmark costs and mitigates the risk of entering into non-market-value contracts. For contracts:
- Under $100,000 (GST inclusive) a minimum of two quotations required.
- Over $100,000 (GST inclusive) a minimum of three quotations required.
Only industry-standard building contracts may be used. These are available from:
- Standards Australia
- NSW Department of Fair Trading
- Housing Industry Association
- Master Builders Association
- Royal Australian Institute of Architects
Wardens must seek advice from a suitably qualified independent architect or solicitor to determine the most appropriate contract type. The Department of Fair Trading can also advise on a builder’s licensing status and any lodged complaints.
Contract Terms
Contracts must specify a minimum of 14 days (21 preferred) for payment to allow the parish sufficient time to review and approve invoices.
For contracts over $60,000 (GST inclusive), the Parish must engage an independent solicitor to review the contract.
Fixed price (“lump sum”) contracts are required. Design and Construction (D&C) contracts, where the final price is unknown, are not permitted.
Insurance Requirements
Before a contract can be signed, contractors must provide certificates of currency for the following insurance policies on the insurer’s letterhead:
- Home Building Compensation (HBC) is required for residential building work valued over $20,000 (GST inclusive), as per the NSW Home Building Act 1989.
- Contract Works Insurance covers loss or damage to materials or work. Strongly recommended to prevent disputes.
- Professional Indemnity Insurance is required for architects, engineers, certifiers, and consultants providing professional services (e.g. design, certification, contract admin).
- Public Liability Insurance protects against third-party injury claims arising from construction work.
- Workers Compensation Insurance: Covers employees injured on-site. If a contractor is uninsured, the parish may be liable.
Contract Payments
Contracts must comply with the Building and Construction Industry Security of Payment Act 1999 (NSW) and its associated regulation.
- Progress payments must be defined in the contract and based on work completed or goods/services supplied.
- Upon receiving a payment claim, wardens may issue a payment schedule within:
- the period stated in the contract, or
- 10 business days after receiving the payment claim (whichever is earlier).
The payment schedule must include:
- The payment claim being responded to
- The scheduled payment amount (if any)
- An explanation if less than claimed
- Reasons for withholding payment, if applicable
Work Health and Safety (WHS)
The builder must be responsible for WHS obligations on the construction site. If the construction work is valued at $250,000 or more, it is called a construction project and a principal contractor must oversee the project.
The builder must:
- Accept control of the site for the purposes of the WHS legislation
- Prepare appropriate risk management procedures (including Safe Work Method Statements, if applicable)
- Ensure compliance with all WHS obligations by themselves and their subcontractors
- Avoid any action or omission that would cause the APT to breach WHS obligations
- Immediately notify APT of any accidents or notifiable incidents
For a construction project, the builder must be:
- Formally appointed as the Principal Contractor
- Authorised to manage and control the workplace and fulfil the duties of a Principal Contractor
These obligations must be included in the contract. The parish’s solicitor is responsible for drafting and negotiating appropriate clauses with the builder.
Signing the Contract
All contracts signed by the APT must:
- Be prepared in duplicate or triplicate (originals only — photocopies are not accepted due to copyright laws)
- Include matching numbers of original supporting documents (for example, plans, consents, specifications)
To avoid delays, ensure the builder has signed all counterparts before submitting to the APT.
The following must be provided to the APT before signing:
- Approval email/letter from the Regional Bishop
- Parish Council Consent, detailing contract specifics and signed by a majority of council members
- Warden’s Declaration of Sufficient Funds confirming designated project funding
- Australian Lawyer’s Certificate, certifying the contract was reviewed and its terms explained to the Wardens
- Builder’s Certificates of Insurance (as listed above)
Project Funding
If the funds already held in trust by the APT are insufficient to cover the contract amount, the Parish must transfer the required balance before the contract can be signed.
Contingency Requirements
The APT requires a contingency sum to be held in trust in addition to the contract amount:
- Contracts $100,000–$499,999 (incl. GST): 5% contingency
e.g. For a $400,000 contract, $420,000 must be held in trust. - Contracts $500,000–$4,999,999 (incl. GST): 10% contingency
e.g. For a $1,000,000 contract, $1,100,000 must be held in trust. - Contracts $5,000,000+ (incl. GST): 5% contingency
e.g. For a $5,000,000 contract, $5,250,000 must be held in trust.