What is the maximum deposit a NSW builder can ask for?

The Home Building Act caps the deposit for residential building work at 10% of the contract price. A request for more than that is unlawful and a clear red flag. Confirm the current figure on fairtrading.nsw.gov.au before you pay.

Should progress payments be tied to dates or to work done?

To work done. Progress payments should be linked to completed stages of the build, not to calendar dates, so you never pay ahead of the work that money represents.

Questions to ask a builder before you sign

Short answer

Before signing, get five things in writing: the licence number (and confirm it is Current and covers your work), the exact legal entity you are contracting with, the Home Building Compensation certificate for jobs over $20,000, a fixed contract price with a deposit no greater than the legal cap, and progress payments tied to completed stages. If a builder resists putting any of these in writing, treat it as a warning.

The questions below take one conversation and expose most of the problems that turn into disputes. Get the answers in writing.

1. What is your licence number, and who holds it?

Ask for the number, then verify it yourself on the licence register. Confirm it is Current, that its class covers your work, and — critically — that the licence holder matches the legal entity on the contract. A quote from “Smith Homes” with a contract naming a different Pty Ltd is the single most common trap.

2. What legal entity am I contracting with?

Get the full company name and ABN. This is the entity you would have to pursue if something goes wrong, and the entity whose insolvency history you should check on ASIC.

3. Where is the HBC insurance certificate?

For work over $20,000, the builder must provide a Home Building Compensation certificate for your job before taking a deposit. Ask for it up front. No certificate, no deposit.

4. What is the deposit, and is it within the cap?

The deposit for residential building work is capped at 10% of the contract price. A builder asking for 20%, 30%, or “half up front to buy materials” is either uninformed or a risk. Confirm the current cap on fairtrading.nsw.gov.au.

5. How are progress payments structured?

Payments should be tied to completed stages, not to dates. You should never be paying for work that hasn’t happened yet.

The check the questions can’t answer

Even honest answers to all five don’t reveal a builder’s history — past disciplinary findings, rectification orders, or a director’s trail of failed companies. Those live across the licence register, ASIC, and Fair Trading’s disciplinary records. BuilderVet joins them into one profile, including records since removed upstream, so you can walk into that conversation already knowing the answers. Start at the builder directory.