Two of the most common ways a residential job turns into a fight: the deposit (can you keep it if they pull out?) and scope creep (who pays when the job grows?). Here is where you stand on both — and the contract clauses that get struck down if you over-reach.
How much deposit you can take
- NSW: 10%
- VIC: 10% (under $20,000) / 5% ($20,000+)
- QLD: 20% (up to $3,300) / 10% ($3,301–$19,999) / 5% ($20,000+)
- SA: $1,000 (up to $20,000) or 5% (over $20,000) — not 10%
- WA: large upfront deposits restricted before substantial work or materials
Taking more than the cap is an offence — see the Deposit Caps & Home Warranty card.
Can you keep the deposit if the owner pulls out?
A tribunal treats a deposit as security for your genuine pre-construction costs and loss of bargain — not a windfall or a penalty:
- Owner lawfully terminates (your breach): they usually get a refund (whole or part), less your proven reasonable costs.
- Owner wrongfully pulls out ("changed their mind"): you can often keep some or all — but only to cover real costs (estimating, design, approvals, admin) and provable lost profit, where the contract clearly allows it.
- A "non-refundable in all circumstances" clause is tested against the penalties doctrine and unfair-terms law — if it is out of proportion to your actual loss, it is read down and the excess refunded.
So to keep a deposit, prove the costs. Bare "non-refundable" wording is increasingly risky.
Scope creep — who pays when the job grows
The classic standoff: the owner says items "should have been included"; you say the extra requests are variations. How tribunals lean:
- A strong preference for written, signed, priced variations — they are reluctant to award extra without compelling evidence of agreement, which is exactly why getting variations in writing matters so much.
- Where the owner clearly requested and received a benefit that was not documented, you might recover a reasonable amount on quantum meruit — but usually less than if you had papered it properly.
- Ambiguities in the original scope are read against the drafter (you) under consumer-law principles.
Bottom line: undocumented extra work is you gambling on tribunal recovery. Paper every variation.
The contract clauses that get struck down
Unfair-terms law (the same regime in Residential Contracts & the ACL) routinely reads down or voids: one-sided termination rights; non-refundable deposits or excessive cancellation fees (especially early, when little work is done); unilateral price/material/timeline change powers; clauses excluding statutory warranties; broad "entire agreement / no reliance" wording; and unreasonably short defect or variation time bars. Safer drafting: tie any retained deposit to demonstrable costs plus lost profit (a simple formula), use a clear bilateral written variation process, mirror the statutory rights, and explain the big clauses in plain English.
Common mistakes
- A blanket non-refundable deposit with no link to actual loss.
- Doing undocumented extras and hoping the tribunal pays you.
- Over-reaching boilerplate that gets read down anyway.
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