Not everyone’s interested in contracts and paperwork, but this one might be worth a closer look. A QCAT decision earlier this year sent a very strong message to builders, all because of one missing document: the Consumer Building Guide.

We’ve covered this topic a little bit this week…

Yesterday, we wrote about the Sunshine Coast Breakfast Club event hosted by Master Builders Queensland. At the event, Brendan Bathersby from Bathersby Legal discussed providing critical documents, including the consumer building guide, which needs to be tied into your contract, locked in, and acknowledged by the consumer. Pete also broke it down on the podcast this week, and we’re unpacking it here a bit more to add a bit more context and help explain why it should matter to you, even if you think you’ve got everything else covered.

What’s the story?

The case landed in the Queensland Civil and Administrative Tribunal (QCAT) late last year. It all kicked off when a builder completed a home for a couple in Buderim under a cost-plus contract back before COVID-19 (October 2018). The job was done, the clients moved in early, and everything seemed to be rolling along.

Then, the final invoice landed, but the clients refused to pay it.

Why? They said the builder hadn’t given them a copy of the consumer building guide, something the law says you must provide before the contract is signed. Without going into the full judgement (read it here), the client argued the contract was void and they didn’t owe the final bill.

In the end, the Tribunal agreed.

Why it matters

You might think, if the job’s done and the client’s moved in, surely the client owes you the final payment. In Queensland, however, there are specific consumer protection rules in play, and one of them is this: if you don’t provide the consumer building guide before the contract is signed, the owner can walk away.

Doesn’t matter if you built the house, poured the slab, or handed over the keys.

Pete summed it up on the podcast,

“The clients said to them, we’re not paying, and the builder’s like, well, you have to. And they said, well, you didn’t give us a consumer building guide, so we don’t need to make the final payment.”

Even though the builder argued the clients were experienced in construction themselves and claimed they refused the guide, QCAT said that didn’t cut it.

What do we know about the guide?

If you’ve never paid much attention to the importance of the consumer building guide is a short document put together by the Queensland Building and Construction Commission (QBCC). It spells out in simple terms the rights and responsibilities of both builder and client. If the building work is priced at $20,000 or more, before the owner signs the contract, the building contractor must give them a copy of the document.

It’s not just helpful. It’s mandatory.

Under the QBCC Act, failing to provide it before signing the contract gives the owner a legal out.

In this case, that’s exactly what happened. 

In the QCAT judgment, the Tribunal found that because the builder failed to provide the consumer building guide as required under section 35(3) of Schedule 1B to the Queensland Building and Construction Commission Act 1991, the client was legally entitled to withdraw from the contract.

This withdrawal meant the builder was not entitled to claim the final invoice. The Tribunal ruled that the builder was legally required to refund over $28,000, the amount the clients had overpaid above what the builder could prove as actual out-of-pocket expenses.

What should you watch for?

If you’re a Queensland builder, this case should set off alarm bells. It’s not about whether the work was good or the clients were reasonable; it’s about compliance.

Here’s what to check before your next job:

• Did you give the consumer building guide before the client signed – each and every time?
  
• Do you have evidence that you did and that it was acknowledged (email, signed receipt, or hard copy)?
  

Cover yourself even if your client is experienced or seems relaxed about the paperwork. 

Don’t assume they’ll stay relaxed if money gets tight or something goes wrong.

It might seem like a small detail, but in this case, it cost more than chump change as well as the years and stress in and out of QCAT, all for missing a document that should be part and parcel of the process of signing a deal with a client.

Author: Jonathan Tibbits

Starting his career as a lawyer, Jonathan transitioned into project management, compliance, and certification for companies throughout the industry supply chain in Australia and New Zealand. With international experience in green building, sustainability and stakeholder communication, he is passionate about innovation and building transparency and trust.