How to check a builder before you sign
The practical due-diligence checklist for SA and Victoria: licences, insurance, references and the warning signs that a builder may be under strain.
The single biggest risk in building is choosing the wrong builder, and a run of high-profile collapses has made everyone nervous. The good news is that most trouble shows up in advance if you know where to look. A bit of homework before you sign protects you far more than anything in the contract after you have committed. Here is how to do it properly in SA and Victoria.
Check the licence or registration
Start with the basics. In South Australia a residential builder must hold a current building work contractor licence, which you can check through Consumer and Business Services. In Victoria they must be registered with the Victorian Building Authority. Confirm the licence or registration is current and in the name of the company or person you are actually contracting with, not a related entity.
Confirm the insurance
Make sure the right building indemnity cover is in place before you pay beyond a deposit. In SA this is Building Indemnity Insurance, and in Victoria it is Domestic Building Insurance. This cover protects you if the builder dies, disappears or becomes insolvent, so it is not a box-ticking exercise, it is your safety net.
Talk to real clients and read the contract
Ask for references from recent clients and actually call them, and if you can, visit a current site. A collapse is usually an estimating and cash-flow problem, so a builder who is open about current supplier pricing, realistic timelines and a clear fixed-price contract is reassuring. Be wary of pressure to sign quickly, a price well under everyone else, and a quote stuffed with vague allowances.
Green flags vs warning signs
- Valid, current builder licence or registration
- Proper insurance in place before work starts
- Happy recent clients you can actually speak to
- Clear, itemised, fixed-price contract
- Open about current supplier pricing and timelines
- Pressure to sign or pay a large deposit fast
- A quote well below everyone else
- Vague allowances and lots of provisional sums
- Reluctance to provide references or proof of insurance
- Current projects that are stalled or badly behind
Do the homework before you sign, not after. Confirm a current licence or registration, check the right insurance is in place, speak to recent clients, and read the contract for vague allowances. If a builder resists any of this, or the price looks too good to be true, treat that as the warning it almost always is.
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Match me with 3 buildersCommon questions
How do I check if a builder is licensed?
In South Australia, check the builder holds a current building work contractor licence through Consumer and Business Services. In Victoria, confirm they are registered with the Victorian Building Authority. Make sure it matches the exact entity you are contracting with.
What insurance should my builder have?
Before you pay beyond a deposit, confirm the right building indemnity cover is in place: Building Indemnity Insurance in SA, or Domestic Building Insurance in Victoria. It protects you if the builder dies, disappears or becomes insolvent.
What are the warning signs of a builder in trouble?
Pressure to sign or pay quickly, a quote well below everyone else, lots of vague allowances and provisional sums, reluctance to provide references or proof of insurance, and current projects that are stalled or badly behind schedule.
Why do builders go broke mid-project?
It is usually an estimating and cash-flow problem rather than bad intent. When fixed prices are set too low against rising supplier costs, the maths catches up. That is why a builder who is open about current pricing and realistic timelines is a good sign.