Posted 18th Mar, 2022

What Is A Preliminary Agreement?

If you’re thinking about building a new home, you’ve probably come across the term “preliminary agreement.” But what is a preliminary agreement, and do you need one?

Preliminary agreements can be a bit confusing, especially if you’re not familiar with the legal terminology. But don’t worry, we’re here to help! In this post, we’ll explain what a preliminary agreement is and what it entails. We’ll also explore some of the benefits of preliminary agreements for both buyers and builders.

Here’s what you need to know.


Defining A Preliminary Agreement In Building

A Preliminary Agreement (PA), or Preliminary Building Agreement (PBA), is a common document used by builders to establish expectations and prices in the early stages of building a new home.

Every PBA is uniquely created for your block of land and your custom home. With a PBA, your builder can access the necessary reports to conduct an investigation of your build site and see exactly what can and can’t be done.

It’s a precursor contract to draw up building plans and the goal is to prepare an in-depth and accurate fixed price tender. This means you won’t be caught off guard by unexpected expenses midway through the project.

Is A PBA Necessary?

If you want to be safe, yes. Although often overlooked, it’s well worth the effort for the protection it provides.

Building a home is a huge investment and you need to be able to trust that your builder is being accurate and truthful. A detailed preliminary building report is a good sign that they’re doing their due diligence and have investigated your build site thoroughly and competently.

A PBA can help you avoid building defects, delays, conflict and additional unforeseen costs associated with building your new home. Although there is a cost, it’s much better to have that peace of mind prior to signing a contract rather than being hit with unexpected hidden costs once the build starts.

What Does A PBA Include?

So, what should you look for in a PBA?

It should have an itemised list of reports related to your build site. This enables the builder to provide an accurate fixed price tender. The more detail, the better! Each point should help you understand where your money is being spent.

An all-encompassing building agreement will cover reports such as soil classification, engineering and a full planning drawing.

Here’s a breakdown of common points:

  • One-on-one with your builder’s design team to work together on the layout and design features
  • Meeting with the council to make sure the design meets requirements and is approved.
  • Detailed documentation on the floor plans and elevations for council submission, as well as a site plan for the building site scale.
  • Important documents such as a streetscape plan, site works, preliminary construction report and contour survey.
  • Professional builders will also provide stormwater calculations and an energy efficiency report.

All these are designed to provide you with the information necessary to make a decision on the final price.

Speak To Professional Builder Today

Building a new home can be a very overwhelming process. There are many factors to consider, and it’s important that you have accurate and detailed information from the get-go.

Trust is a central part of our services at Emerald Developments. We make sure to be open and transparent throughout the entire process, so you avoid unexpected surprises down the line.To enquire about building a home with Emerald Developments, contact us today!