Pool Builders are being reminded of their legal responsibilities when it comes to requesting deposits from customers. Asking for a deposit greater than allowed under legislation is illegal and can incur harsh penalties such as cancellation of contracts and voiding insurance policies.
Under the Domestic Buildings Contracts Act 1995 there is a maximum deposit that builders can request as a deposit.
If the contract
price is:
- $20,000 or less, you cannot be asked to pay over 10% of the contract price as a deposit
- more than $20,000, you cannot be asked to pay over 5% of the contract price as a deposit.
If the work is required to be covered by home warranty insurance, it is illegal for the contractor to ask for a deposit or other payment under the contract, unless home warranty insurance has been taken out, and a certificate of the insurance is provided.
Progress payments are made at specific stages of a project and should equate to the value of work done. Under no circumstances should you request the client to pay for work that has not been performed or pay any money in excess of that required under the contract.
For more information on the Domestic Buildings Contracts Act 1995 visit www.legislation.vic.gov.au