Questions to ask before hiring a tradesperson or builder

You should only deal with a properly licensed contractor. Check their details and credentials, and review their history for any disciplinary actions to make sure you're hiring someone reliable.

Check a licence 

Ask the builder or contractor for verbal references from previous clients to understand their satisfaction with the results.

Some questions you can ask:

• Was the project finished on time?
• Did they stay close to the quoted costs?
• Was there proper supervision of the other tradespeople?
• Did any defective work get fixed promptly?
• Would they recommend the contractor?
• Was there good communication with the contractor?

A contractor doing a large job may get a supervisor to manage the project.

Make sure the supervisor has:

• enough experience in the type of work you want done and
• a current Supervisor Certificate from Building Commission NSW and
• their contractor's licence is properly approved.

It is important to check the contractor has all the necessary insurance cover to protect you and your home if something goes wrong. The types of insurance that may be required include:

• Home Building Compensation Fund Insurance
• Builders All-Risk Insurance
• Public Liability Insurance
• Workers Compensation or Insurance
• Kit homes and Insurance
• Contracts Insurance

For more information, visit the insurance page.

Under NSW home building law, the maximum deposit you can be asked to pay is 10%.

If the work is required to be covered by insurance under the Home Building Compensation Fund, it is illegal for the contractor to ask for a deposit or other payment under the contract unless the insurance has been taken out, and a certificate of cover is given to you.

If you want the work done by a specific date, make sure the time frame provided in the contract:

• is realistic
• takes into account possible delays through bad weather or the late supply of materials
• has a start date and completion date.

Make sure you and the contractor are clear on what they consider 'complete'.

If the cost of labour and materials is more than $5,000, the law requires a written contract to be used.

Contracts are not only a legal requirement but also protect you if something goes wrong. For more information, visit the contracts page.

Knowing how costs are set and what might cause them to change can help you plan and budget better. Consider these important points:

• the contractor includes the total cost of the work in the contract
• estimated costs are clearly stated in the contract and are realistic
• you understand how and why costs may change and how the total cost can be affected. For example, some builders will specify the site cost in the contract as a ‘provisionary cost item’. This means the cost may change depending on the builder's actual expenses in preparing the site. If the site is difficult to build on, or the builders hit solid rock, it will cost you more.

Most building contracts are based on a fixed price, with payments tied to the completion of specific stages of work rather than the time spent on the job. Progress payments should reflect the actual dollar value of the work completed at each stage.

If you've borrowed to build or renovate, your bank or mortgage provider may want to inspect the work before each payment is made. You may want to have an architect or building consultant inspect the work at each stage to confirm it is being done properly and to contract specifications and drawings.

This question will help you get a sense of how the builder is likely to deal with any complaints you may have about the work. You should know in advance what your options are if a dispute arises.