The 9-Point Builder Check: What to Verify Before You Sign a Contract

Don't sign or pay until you’ve passed the "One-Way Door Gate."

When you’re planning a new build or a major renovation, some decisions are easy to unwind. Others are not. For most Australians, this is the biggest investment of your life. You don’t need to be an expert to act prudently; you just need to step through the "one-way doors" with fewer blind spots.

What is the "One-Way Door Gate"?

We make thousands of decisions daily. The vast majority are Two-Way Door decisions - they are reversible. You can walk back through them with little impact.

One-Way Door decisions have a lasting impact. Once you commit, you can’t unwind them without incurring high costs, time, and legal effort. Before you sign a contract or pay a deposit, you are standing at the gate.

• If the picture is clear: Proceed with confidence.
• If the picture is unclear: Pause. You still have the leverage.
• If the picture shows adverse signals: Walk away. This is why you did the due diligence.

The 9-Question Builder Confidence Check

1. How long has the builder been in business?

Why it matters: A longer history indicates stability. The key is the history of the contracting entity, not just the marketing brand.

• Clear: The timeline on paperwork matches the ASIC registry.
• Unclear: Vague answers like “we’ve been around for years” while the ABN was registered six months ago.

2. Does the builder have an up-to-date licence?

Why it matters: This is the baseline "permission to operate."

• Clear: The licence is current and matches the name on your contract.
• Unclear: The builder says "we’re licensed," but the name on the registry is a different company or an individual you haven't met.

3. Does the builder have mandatory insurances?

Why it matters: This protects you if the builder becomes insolvent, dies, or disappears. Without it, you are personally liable for the fallout.

• Clear: They provide project-specific evidence (HBCF in NSW, VMIA in VIC, etc.), not just a generic public liability certificate.
• Unclear: Confusion between "Public Liability" and "Home Building Compensation Cover." They are not the same.

4. Do the directors have a history with other building companies?

Why it matters: Understanding who is behind the company helps you spot "phoenixing" (closing one failed business to start another) or confirmed success in previous ventures.

• Clear: A transparent history that the builder can explain simply.
• Unclear: Links to multiple liquidated entities with no straightforward explanation.

5. Is there a history of disputes or tribunal appearances?

Why it matters: Disputes happen, but a pattern of litigation is a red flag.

• Clear: No history, or a one-off minor case from years ago.
• Unclear: Recurring appearances in state tribunals (like NCAT or VCAT) for the same types of defects.

6. Is there a history of regulatory sanctions?

Why it matters: This shows if a regulator (like Fair Trading, the ACCC or an OH&S regulator) has officially flagged their conduct.

• Clear: A clean record across federal and state regulators.
• Unclear: Adverse entries or "banned/disqualified" statuses for key personnel.

7. Does the builder have established trade supply arrangements?

Why it matters: This is a "pulse check" on the business. If suppliers trust them, you can likely trust their timeline.

• Clear: Stable relationships with major local suppliers.
• Unclear: Frequent changes in suppliers or "cash only" arrangements.

8. Do they pay their bills on time?

Why it matters: Financial strain at the office leads to delays at your site. Late payments to subcontractors are often the first sign of a project about to stall.

• Clear: A clean credit profile with no defaults.
• Unclear: Evidence of persistent payment stress or debt collection activity.

9. Is there any history of insolvency actions?

Why it matters: This is the ultimate "One-Way Door" risk. If a builder goes under mid-build, your investment is in jeopardy.

• Clear: No material insolvency history.
• Unclear: Current or past liquidation, administration, or court-ordered winding up.

How to Interpret the Data (The Calm Homeowner’s Rule)

Don't overreact to a single data point. Instead, look for patterns:

1. Recency: Is the issue from 10 years ago or last month?
2. Frequency: Is it a one-off or a habit?
3. Consistency: Does the builder’s story match the public record?

The Rule: A "Pause" is a valid decision. If you feel pressured to "sign now to lock in the price," that is your signal to slow down and run the check.

Run a "Check My Builder" Report

The simplest way to run this integrated 9-question check, from credit history to licence status and regulator sanctions, is to get a comprehensive report before you sign.