Quantity Surveyor Agreement (Australia)

A Quantity Surveyor Agreement in Australia records the quantity surveying to be provided, the fees, the service standards, and each party's obligations between the provider and the client under the Corporations Act 2001 (Cth).

In the construction sector, quantity surveyors provide cost planning and estimation during design development, bill of quantities preparation, tender evaluation and recommendation, contract administration, progress payment assessments, variation claims assessment, and final account preparation. These services are used by property developers, builders, infrastructure owners, and government bodies across all states and territories. The Australian Institute of Quantity Surveyors (AIQS) — headquartered in Sydney — is the peak professional body setting professional standards, a code of ethics, and continuing professional development (CPD) requirements for members holding the MAIQS (Member) or FAIQS (Fellow) designation. The Royal Institution of Chartered Surveyors (RICS) also has Australian members operating in the quantity surveying profession.

For property investors, the quantity surveyor's most commercially significant role is the preparation of tax depreciation schedules for investment properties. The Australian Taxation Office (ATO) allows property investors to claim capital works deductions under Division 43 of the Income Tax Assessment Act 1997 (Cth) for the depreciation of the building structure at a rate of 2.5% per year over 40 years, and plant and equipment depreciation under Division 40 for eligible depreciable assets using the diminishing value or prime cost method. Under ATO Tax Ruling TR 97/25, construction cost estimates used for Division 43 claims must be prepared by a suitably qualified person — and the ATO recognises qualified quantity surveyors as satisfying this standard. A thorough tax depreciation schedule prepared by an AIQS member can generate substantial additional annual deductions for residential and commercial property investors.

The Treasury Laws Amendment (2017 Enterprise Incentives No. 1) Act 2017 (Cth) introduced restrictions on plant and equipment depreciation claims for second-hand residential investment properties acquired after 7 May 2017, and a QS Agreement should specify whether the property is subject to these restrictions. The Building and Construction Industry Security of Payment Act 1999 (NSW) (SOPA), Building Industry Fairness (Security of Payment) Act 2017 (Qld), and equivalent state security of payment Acts govern progress payment claims in construction projects where the QS plays a certification role.

The Australian Consumer Law (Schedule 2 to the Competition and Consumer Act 2010 (Cth)) applies to QS services provided to consumers, including the statutory guarantee under s 60 that services will be rendered with due care and skill. The Corporations Act 2001 (Cth) governs the contracting entities where either party is a company. The Privacy Act 1988 (Cth) and Australian Privacy Principles (APPs) administered by the Office of the Australian Information Commissioner (OAIC) apply to client personal and financial information. The Federal Court of Australia and state Supreme Courts have jurisdiction over professional negligence claims. Forms-legal.com provides this Australian Quantity Surveyor Agreement template as a starting point for QS engagements across all project types and states.

A Quantity Surveyor Agreement in Australia should be signed before any QS services commence — whether for a construction project engagement or a property investor's tax depreciation schedule. A written agreement precisely defines the scope, fees, professional standards, and liability allocation that apply, and protects both parties if a dispute arises.

For construction projects, a QS Agreement is needed when engaging a quantity surveyor at any stage: during early design (concept cost planning and feasibility studies); during design development (detailed cost estimates, elemental cost plans, and value management workshops); at tender stage (bill of quantities preparation, tender document review, tender analysis, and written recommendation to the client); or during construction (contract administration, progress payment certification, variation assessment, and final account preparation). For projects in NSW, the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOPA) — and its equivalents including the Building Industry Fairness (Security of Payment) Act 2017 (Qld), the Building and Construction Industry (Security of Payment) Act 2002 (Vic), and the Construction Contracts Act 2004 (WA) — governs progress payment claims and disputes. The QS Agreement should clearly specify the QS's role in assessing and certifying payment claims under the applicable security of payment Act, including whether the QS is acting as the superintendent or a payment certifier.

For property investors, a QS Agreement is needed when commissioning a tax depreciation schedule for a residential or commercial investment property to support Division 43 (capital works) and Division 40 (plant and equipment) deductions under the Income Tax Assessment Act 1997 (Cth). The ATO requires the construction cost estimate to be prepared by a suitably qualified person — a practising AIQS member satisfies ATO Tax Ruling TR 97/25. The agreement should specify that the schedule will comply with TR 97/25, identify all depreciable assets at the applicable ATO effective life rates, and address whether the Treasury Laws Amendment (2017 Enterprise Incentives No. 1) Act 2017 (Cth) restrictions on second-hand plant and equipment apply to the subject property.

For insurance replacement valuations, a QS Agreement is needed when engaging a quantity surveyor to prepare a full replacement cost assessment for building insurance purposes. Australian insurers require that sums insured reflect the true cost of rebuilding the structure to its current standard, including demolition, professional fees, and GST under the A New Tax System (Goods and Services Tax) Act 1999 (Cth). An AIQS-certified replacement cost assessment is widely accepted by major Australian insurers. A written agreement protects the client if the valuation is later found to have understated the replacement cost and an insurance claim is affected.

For expert witness engagements, a QS Agreement is appropriate when a quantity surveyor is retained to provide expert evidence in construction disputes before the Federal Court of Australia, state Supreme Courts, the NSW Civil and Administrative Tribunal (NCAT), Victorian Civil and Administrative Tribunal (VCAT), or in arbitration under the Australian Centre for International Commercial Arbitration (ACICA) rules. The agreement should address independence obligations under the applicable court or tribunal expert witness rules.

An Australian Quantity Surveyor Agreement should contain the following elements to define the professional engagement clearly and protect both parties under Australian law.

1. QS identification — The QS firm's full legal name, ABN, AIQS membership details (MAIQS or FAIQS designation and membership number), registered office address, and professional indemnity insurance details including insurer name, policy number, and indemnity limit. Confirming AIQS membership satisfies the ATO's qualified person requirement under Tax Ruling TR 97/25 for Division 43 capital works deduction claims.

2. Client identification — The client's full legal name, ABN or ACN (for companies registered with the Australian Securities and Investments Commission (ASIC)), and the full address of the project or investment property to which the services relate.

3. Scope of services — A precise, itemised description of the services to be provided. For construction projects: identify each deliverable (concept cost estimate, elemental cost plan, bill of quantities, tender report, progress payment certificate, variation assessment, final account). For tax depreciation schedules: state that the schedule will identify Division 40 (plant and equipment) and Division 43 (capital works) depreciable assets under the Income Tax Assessment Act 1997 (Cth), comply with ATO Tax Ruling TR 97/25, and address the Treasury Laws Amendment (2017 Enterprise Incentives No. 1) Act 2017 restrictions where applicable. For insurance valuations: specify the basis of assessment (full replacement cost inclusive of demolition costs, professional fees, and GST under the A New Tax System (Goods and Services Tax) Act 1999 (Cth), or indemnity value).

4. Fee and payment terms — The agreed fee in AUD (fixed lump sum, hourly rate, or percentage of project value), the GST treatment, invoicing milestones or monthly progress invoicing, payment due dates, and a late payment interest provision protecting the QS against overdue accounts. The Building and Construction Industry Security of Payment Act 1999 (NSW) and equivalent state security of payment Acts may apply to QS fee claims on construction projects.

5. Timeframes and deliverables — Agreed dates for each key deliverable, any conditions precedent (for example, receipt of architectural and structural drawings before a cost estimate can be finalised), and the consequences of client-caused delay on the QS's fee entitlement.

6. Standard of care — The QS's express obligation to perform all services with the reasonable skill, care, and diligence of a competent AIQS member practitioner. Section 60 of the Australian Consumer Law (Schedule 2, Competition and Consumer Act 2010 (Cth)) implies a statutory guarantee that professional services will be rendered with due care and skill, which cannot be excluded for consumer clients.

7. Professional indemnity insurance — Confirmation that the QS holds professional indemnity (PI) insurance of at least the agreed indemnity limit and will maintain it throughout the project and for a minimum run-off period after project completion. Most AIQS members are required to maintain PI insurance as a condition of membership.

8. Limitation of liability — A contractual cap on the QS's aggregate liability for loss or damage arising from the services, subject to the constraints of the Australian Consumer Law and applicable state proportionate liability legislation — including the Civil Liability Act 2002 (NSW), Wrongs Act 1958 (Vic), Civil Liability Act 2003 (Qld), and Civil Liability Act 2002 (WA). Proportionate liability provisions apply to apportionable claims in professional services contexts.

9. Copyright and ownership of deliverables — Confirmation of who owns the reports, schedules, and documents produced. QS firms typically retain copyright in their work product under the Copyright Act 1968 (Cth) and grant the client a non-exclusive licence to use the deliverables for the specified project purpose only — not for reuse on other projects.

10. Confidentiality — Each party's obligation to keep the other party's project cost data, financial information, and personal information confidential. The Privacy Act 1988 (Cth) and Australian Privacy Principles (APPs) administered by the Office of the Australian Information Commissioner (OAIC) apply to client personal and financial information collected by the QS.

11. Governing law and dispute resolution — The governing Australian state or territory law and a tiered dispute resolution process: good-faith negotiation first, then mediation (through the Australian Disputes Centre or equivalent), then litigation before the relevant state Supreme Court or the Federal Court of Australia. Forms-legal.com provides this template as a starting point for Australian quantity surveyor engagements across all project types and states.