A preliminary agreement should say what early work you will do, what the client pays and when, what they get in return, who owns the drawings, and what happens next whether they build with you or not. Seven headings cover it. This article goes through each one and what to put under it.
It is a contents list, not legal wording. Have your own document checked by a solicitor who knows building contracts in your state before you use it. If you are still deciding whether to charge at all, start with charging for preliminary work. For the amount, see how much to charge. This article is only about what the document says.
What a preliminary agreement is for
It is a short, separate agreement for the work that comes before a build contract: site investigation, design development, drawings, specifications and a priced proposal. The Queensland regulator describes preliminary agreements as made before a building contract, letting a licensed contractor be paid upfront for initial work, such as designs, specifications, soil tests and contour surveys (QBCC, contracts and agreement types).
Open the agreement with one plain sentence on its purpose: "This agreement covers the early work needed to prepare a fixed price for building the project at this address. It is not a contract to build." That sentence matters more than it looks. It tells the client, and anyone reading the document later, what they are signing.
Scope: what you will and will not do
List the tasks, not just the heading "design". For example:
- Site visits and measurements, and how many.
- Reviewing the client’s brief and any existing drawings or reports.
- Arranging or reviewing a survey, soil test or other investigation, and who pays for each.
- Developing concept or working drawings to a stated stage.
- Preparing a specification of materials and finishes.
- Preparing a fixed-price proposal.
Then list what is outside it: council or certifier applications, engineering, interior design, changes beyond a set number of revisions. Write the number. "Two rounds of changes" is a clear line. "Reasonable changes" is an argument waiting to happen.
The fee and when it is paid
State the fee, what it includes and the payment stages. Tie each payment to something that can be checked: on signing, on delivery of concept drawings, on delivery of the proposal. Say what the fee does not cover, such as third-party reports billed at cost, and how those are charged.
State in one sentence what happens to the fee if the client signs a build contract with you. Some builders take the whole amount off the build price. Some take off part. Some do not. Decide before you write the agreement, because the client will ask.
Be careful about how a fee is described. The QBCC page warns that some agreements include fees or penalties if the owner decides not to proceed after receiving the final price, that this may be illegal, and that owners should get legal advice before signing one. Do not write a clause that charges a client for deciding not to build unless a solicitor has confirmed it is lawful in your state.
What the client receives
This is the heart of a paid agreement. If the client cannot see what they are paying for, it reads as a deposit with a new name. List the deliverables, with the format and the date or milestone:
- A set of drawings at a named stage, as PDF.
- A written specification.
- Any site reports or surveys obtained.
- A fixed-price proposal with the scope, inclusions and exclusions, valid for a stated time.
- A meeting to go through it.
Write "the client receives" before each item. It keeps the document in the client’s voice and focuses you on delivering them.
Drawings, reports and who owns them
Settle this in writing, because it causes more disputes than the fee. The questions to answer:
- Who owns the copyright in the drawings: you, the designer, or the client?
- If the client pays and does not build with you, can they take the drawings to another builder? Many builders say yes once the fee is paid in full. Others limit use. Pick and state it.
- Do reports from third parties, such as a soil report, belong to the client and can they be reused?
- Can you use photos of the project in your own marketing?
If a designer or drafter is doing the drawings, check their terms first. You cannot promise the client a right you do not hold.
What happens if they proceed, and if they do not
Put both paths on the page.
If they proceed. You will give them a build contract at the proposal price, within a stated time, and the client has a stated time to accept. State whether the price can change if costs move or if the client changes the design. State how the preliminary fee is treated.
If they do not. The agreement ends when the deliverables are handed over and the fee is paid. State what happens to the drawings, as above. State that neither side owes the other anything further.
Also include an exit before delivery. Either side can end it in writing. The client pays for work done to that date. Keep the wording fair and simple. A one-sided exit makes the agreement look like a trap.
Rules that can apply by state
Early-stage agreements sit close to the rules for building contracts, and states treat them differently. Three examples from regulator pages, each for one state only:
- New South Wales. The Government’s guide says preliminary work needs separate contracts, that a preliminary contract cannot include residential building work as defined by the Home Building Act 1989, and that if it does include it and the total is over $5,000 including GST, it is treated as a residential building contract (NSW Government, guide to providing home building contracts).
- Victoria. Consumer Affairs Victoria says a pre-construction contract that covers more than a soil report, such as design or specification work or obtaining permits, is a building contract, and if it includes domestic building work priced over $10,000 it is a major domestic building contract (Consumer Affairs Victoria, pre-construction contracts). Its builder checklist gives a $4,000 pre-construction contract plus a $7,000 main contract as an example of splitting a project over the threshold, adding "We do not recommend splitting contracts" (Consumer Affairs Victoria, preparing a major domestic building contract). Victoria’s amended laws take effect by 1 December 2026 and, according to Consumer Affairs Victoria, will let builders and clients make their own agreements for developing drawings, specifications and bills of quantity (Consumer Affairs Victoria, new laws). Check the current rules before you use a Victorian agreement.
- Queensland. The QBCC page above describes preliminary agreements and warns about fees on not proceeding. It gives no fee limit.
South Australia, Tasmania, the ACT, the Northern Territory and New Zealand are not covered here, and the rules change. Check with your regulator or a solicitor for your situation, and get the finished document read by a solicitor before you use it. This article is not legal advice.
The pre-construction page shows how paid early work fits with the rest of the quote.
Common questions
What is a preliminary agreement?
A separate agreement, signed before the build contract, covering early work such as site investigation, drawings and a fixed-price proposal. It is not a contract to build.
What is the difference between a preliminary agreement and a deposit?
A deposit is part of the build contract price. A preliminary fee pays for early work, whether or not a build follows. Rules on deposits are set by state. See deposit limits by state.
Is there a template I can copy?
The headings above are a starting structure. Do not copy a template as legal wording. Have a solicitor prepare or check yours for the state you work in.
Who owns the drawings?
That comes down to what you agree and your designer’s terms. Write it down before the work starts.