Victorian Consolidated Legislation

Domestic Building Contracts Act 1995 - SECT 40

Limits on progress payments

40. Limits on progress payments



(1) In this section-

base stage means-

   (a)  in the case of a home with a timber floor, the stage when the concrete
        footings for the floor are poured and the base brickwork is built to
        floor level;

   (b)  in the case of a home with a timber floor with no base brickwork, the
        stage when the stumps, piers or columns are completed;

   (c)  in the case of a home with a suspended concrete slab floor, the stage
        when the concrete footings are poured;

   (d)  in the case of a home with a concrete floor, the stage when the floor
        is completed;

   (e)  in the case of a home for which the exterior walls and roof are
        constructed before the floor is constructed, the stage when the
        concrete footings are poured;

frame stage means the stage when a home's frame is completed and approved by a
building surveyor;

lock-up stage means the stage when a home's external wall cladding and roof
covering is fixed, the flooring is laid and external doors and external
windows are fixed (even if those doors or windows are only temporary);

fixing stage means the stage when all internal cladding, architraves,
skirting, doors, built-in shelves, baths, basins, troughs, sinks, cabinets and
cupboards of a home are fitted and fixed in position.

(2) A builder must not demand or recover or retain under a major domestic
building contract of a type listed in column 1 of the Table more than the
percentage of the contract price listed in column 2 at the completion of a
stage referred to in column 3.

Penalty: 50 penalty units. TABLE Column 1 Column 2 Column 3

Type of contract Percentage of contract price

Stage Contract to build to lock-up stage 20% Base stage " 25% Frame stage
Contract to build to fixing stage 12% Base stage " 18% Frame stage " 40%
Lock-up stage Contract to build all stages 10% Base stage " 15% Frame stage "
35% Lock-up stage " 25% Fixing stage

(3) In the case of a major domestic building contract that is not listed in
the Table, a builder must not demand or receive any amount or instalment that
is not directly related to the progress of the building work being carried out
under the contract.

Penalty: 50 penalty units.

(4) Subsections (2) and (3) do not apply if the parties to a contract agree
that it is not to apply and do so in the manner set out in the regulations.





(5) If a court finds proven a charge under subsection (2) or (3) against a
builder, it may order the builder to refund to the building owner some or all
of the amount the building owner has paid the builder under the contract.

(6) This power is in addition to the power the court has to impose any other
penalty.

(7) Despite section 7, this section does not apply to a contract between a
builder and the Crown or a public statutory authority.

Division 5-End of the contract