Cost-Plus Residential Building Contracts

Cost-plus is a legitimate and often sensible way to procure residential work, where the owner pays the actual cost of the work plus an agreed margin, which suits projects where scope is genuinely hard to fix up front. The trouble is the contract you reach for. The ABIC CP-2014 C is a commercial cost-plus contract, and residential building work in Australia is governed by consumer-protection legislation that a commercial form does not satisfy.

Used unamended on a home, the ABIC CP-2014 C simply does not contain everything the relevant Act requires. In New South Wales it lacks provisions the Home Building Act 1989 (NSW) requires for residential building work. In Western Australia it lacks the acknowledgment required by section 14 of the Home Building Contracts Act 1991 (WA) for a cost-plus home building contract, and it does not expressly address the home indemnity insurance requirements in Part 3A of that Act.

These Special Conditions adapt the ABIC CP-2014 C for residential use in a version tailored to the state. They modify the contract to the minimum extent necessary to meet the statutory requirements: in NSW, the applicable requirements of the Home Building Act 1989 (NSW); in WA, the section 14 acknowledgment and the Part 3A home indemnity insurance requirements of the Home Building Contracts Act 1991 (WA).

The approach is deliberately light-touch: it adds what the legislation requires without rewriting the commercial bargain the parties have chosen. For builders and owners who prefer cost-plus to a fixed price, it turns a well-understood contract into a practical, balanced alternative to the standard residential cost-plus forms.