Builder broker Emily Pollard has read hundreds of residential construction contracts. What she finds in them is shaping how she thinks about the industry’s next big problem.

Most builders spend months refining their process, their pricing and their sales pitch. They invest in reputation, referrals and presentation. Then they hand over a contract and undo a lot of that work in a single document.

That is not a hypothetical. It is something Emily Pollard, director of Nesta Builder Brokers and co-host of The Good Builder Podcast, sees play out regularly. Pollard sits in an unusual position in the industry. She works with clients to find and select builders, and she works with builders to understand what their contracts mean for the clients they are trying to attract. She has read contracts for fun. She has also watched clients walk away from builds they genuinely wanted because of what they found in the fine print.

The contract conversation, she argues, is one the industry is not having clearly enough.

The Gap Between What Builders Say and What Contracts Say

It starts with something simple. A builder tells a client their average build time is 20 weeks. The contract says 365 days, plus allowances for inclement weather and other delays.

Those are not the same thing, and the difference matters enormously to a client who has organised a rental lease, arranged finance and built a life plan around a completion date.

“We want to make sure that the people’s expectation of what they’ve been told actually meets the contract,” Pollard says.

This gap between verbal assurances and written terms is one of the most consistent patterns she sees. It is rarely intentional deception. It is usually a sales team doing what sales teams do, presenting the best-case scenario without flagging what the contract actually allows for. But once a client reads the document, or more importantly, once their broker or solicitor reads it, the trust that took months to build can fracture fast.

The Clause That Kept a Family Waiting Nine Months for a Slab

The clearest illustration of what poorly constructed contracts can do to real clients involves a North Queensland builder and a clause Pollard says she could almost recite from memory.

A family signed a contract with what appeared to be a reasonable build time. Buried in the special conditions was a provision allowing the builder to issue notices of delay for foreseen issues including trade and supply shortages, with no defined limit on how long those delays could extend.

The builder enacted the clause. Pipes went into the ground. Engineering was approved. Building approval was in place. And then nothing happened for nine months.

“They did not have a slab,” Pollard says. “I could have grown a whole baby in that time.”

When she asked the client whether he would have chosen that builder knowing what was in the contract, the answer was immediate. No.

That is the point. The information was available. It was in the contract the client signed. But no one sat down and explained what it meant before the relationship was formalised and the preliminary money was paid.

The builder, Pollard notes, also had questionable logic on their side of the ledger. In a market where build costs are live and margins are being compressed, holding a fixed-price contract open for nine months without breaking ground is not a protective strategy. It is a path toward delivering a job for very little return, or no return at all.

When Provisional Sums Become a Problem

Provisional sums are another area where contracts can quietly set up disputes that damage builders and clients alike.

A provisional sum is an estimated allowance for work or materials that cannot be priced exactly at the time of contract. Used correctly and transparently, they are a legitimate tool. Used loosely, they become a source of significant cost blowouts that clients feel were never disclosed.

Pollard describes reviewing a contract for a client after they had already selected their builder, a situation she cautions against but understands is common. The contract included a provisional sum for slab requirements on a site with uncontrolled fill, a known variable that should have prompted a geotechnical report before the contract was signed. The allowance for piers was $2,000.

“For a 330 square metre house, on a site with up to 1.5 metres of uncontrolled fill,” Pollard says. “Two thousand dollars is going to get you maybe four piers.”

The client was told $2,000 was more than reasonable. Engineering eventually came back at $35,000.

The builder was not fabricating the cost. That is what the engineering actually required. But the provisional sum had been set without any data, without a quote, and without explaining to the client what the risk range actually looked like. The result was a $35,000 variation on a contract the client had signed believing they understood what they were committing to.

Transparency as a Business Decision, Not Just an Ethical One

Pollard is careful not to frame this as builders behaving badly. She is clear that most contracts she reviews reflect builders trying to protect themselves in a difficult operating environment, not attempting to deceive clients.

The post-COVID period showed what happens when build costs move sharply and contracts offer no protection. Many builders are still carrying the scars of that experience, and the current uncertainty around material costs and trade availability is prompting similar risk management responses in contract conditions.

“I’m the biggest advocate for people making money in this industry,” Pollard says. “It needs to be feasible.”

But the question she asks builders is a practical one, not a moral one. If your contract conditions are going to prevent clients from obtaining finance, or cause them to walk away once they understand what they have signed, are those conditions actually protecting you?

Lending is tightening. Banks are scrutinising construction contracts more carefully, including how progress payment stages are defined, how provisional sums are handled, and how delay clauses are structured. A contract that works for a cash buyer or a well-capitalised investor may not work at all for the majority of clients now entering the market.

“If a whole cohort of clients is not willing to exist within your parameters, what are you actually doing?” Pollard asks. “You’re probably only going to find that out after you’ve spent six months working toward a contract that will never proceed.”

Show the Contract Earlier

Her practical recommendation to builders is straightforward. Show clients a redacted version of the standard contract before the preliminary agreement is signed. Not after months of selections and design development. Before.

This does not require builders to change their contracts or reduce their protections. It simply means being transparent about what the contract contains at the point where clients can still make an informed choice. It surfaces incompatible expectations early. It filters out clients who are unlikely to proceed, saving time and resources on both sides. And it prevents the specific moment Pollard describes as one of the most damaging in the builder-client relationship, where a client who has already paid a preliminary fee reads a contract they feel was deliberately withheld.

“They feel you’ve pulled the wool over their eyes,” she says. “And once the trust is gone, the reputation starts to fall.”

The builders who resist showing contracts early are not always trying to hide something. Sometimes they are worried about competitors seeing their terms, or simply do not see why it is necessary. But the logic does not hold under scrutiny. Clients are going to see the contract eventually. If the terms are sound, transparency costs nothing. If they are not, discovering that nine months into a process costs considerably more.

What Builders Can Do Now

There are three things worth examining if you are a builder reassessing how your contracts are working.

The first is transparency. What would it look like to share a redacted version of your contract with qualified clients before the preliminary stage? If the answer raises concerns internally, those concerns are probably worth understanding.

The second is enforceability. Some of the special conditions now appearing in Australian residential contracts have been tested in court and have not held up. The post-COVID period generated legal precedents around rise-and-fall clauses and delay provisions that changed what builders can actually rely on. If your protection depends on a clause whose enforceability is uncertain, it may be worth reviewing with a construction solicitor.

The third is provisional sums. If you are using them, are they backed by data? Can you show a client the quote or estimate that underpins the allowance? Provisional sums are not inherently problematic, but provisional sums set without supporting information are a documented source of contract disputes and broken client relationships.

None of this requires a builder to operate against their own interests. It requires being honest about what the contract contains and who it works for.

“Be better,” Pollard said at the close of the conversation.

It is a short line. But in a market where client expectations are shifting, finance conditions are tightening and the cost of contract fallover is rising, it covers a lot of ground.

Author: TGB Editorial