If you have a contract to sign, defects in your building works, or you’re just not happy with your builder, we can help.
Builders often have years of experience, industry bodies and even lawyers, to help them navigate the pitfalls and traps of building in what is a highly regulated industry. There are at least four different Acts of Parliament which are likely to be relevant to the building of a new home in Victoria. Who do you have guiding you?
Whether you’re about to commence the building of a new home, an addition and renovation, or you just want to build a garage or a deck, there are things you need to know before you get started. For instance, do you know whether your builder is required to provide warranty insurance for your project? or that there is a maximum amount of deposit your builder can ask for under the relevant legislation? Contact us to find out more.
Building Contracts
Before you sign your Building Contract, come and speak to us about what you’re signing up for. After all, you will most likely be asked to sign one of the standard industry prepared contracts. That’s a contract that has been prepared by one of the industry bodies representing builders, such as the Housing Industry of Australia (HIA) or the Master Builders Association of Victoria (MBAV). In whose favour do you think that standard contract is drafted? If you guessed the Builder, you’d be right.
Many times over the years I have been asked to assist clients who have made progress payments to builders, prior to the relevant payment stage being completed. When I have asked them why they did not follow the payment schedule set out in the contract, invariably the answer has been; because he was such a good bloke. This may be true, but that doesn’t mean that you make payments outside the contractual framework. Importantly, these payments are classified as ‘over payments’ and they are not covered by warranty insurance. Take my advice, don’t do it.
Unless you fully understand the meaning and operation of such terms as Liquidated Damages, Delay Damages, Provisional Sum and Prime cost Items, extensions of time and variations, you’re not ready to sign that building contract.
Defects and Building Disputes
If you are having difficulty with your builder, be it related to the progress of the works, the cost of the works, or the standard of the works, seek advice.
There are many factors that can impact on the progress of your building works, some of them out of the builder’s control. However, there are procedures under most building contracts to deal with delays and extensions of time. You need to be aware how to respond to an extension of time. You also need to know that you have a statutory right to terminate the building contract if the builder falls too far behind.
It is not unusual for the final cost of building works to exceed the amount of the building contract. That is because the builder will be entitled to claim cost variations under the contract in certain circumstances. However, you need to ensure you are not being charged for variations the builder has no right to claim.
It is very common for clients of builders to claim that the building works undertaken by the builder contain defects. But how do you know what constitutes a defect? The simple answer is to refer to the Guide to Standards and Tolerances published by the Victorian Building Authority. Whilst the guide will not be applicable in assessing all alleged defects, it is a good starting point. If defects exist and the builder refuses to rectify them, you may have to make a claim against the builder. However, you should not simply stop paying or with hold part payment from the builder, as this conduct may result in you breaching the contract, the consequence of which could be serious.
Warranty Insurance Claims
If your builder has failed to complete your building works, or the works contain genuine defects, and the builder has died, cannot be found, or has become insolvent, you may be entitled to make a claim on the builder’s warranty insurance policy. What is important when making such a claim is that you accurately identify the incomplete and defective works. This is best done with the assistance of a building consultant who can identify and cost the completion/rectification works. It is also important that your claim and all the supporting documentation is assembled and submitted in a logical and sequential order. We are experienced in this process and we have been successful in claiming the maximum amount able to be recovered under the relevant insurance policy for some of our past clients.
Protection Works
If your neighbour is building on or close to the common boundary, it is likely that he/she is required to serve protection works notices on you. What this means is that the owner of the adjoining property must provide information to you that sets out the works to be undertaken and what steps are to be taken to protect your property. Under the Building Act 1993, you are entitled to have the proposed protection works assessed and to claim from the adjoining owner, the reasonable costs of the assessment. You may also be entitled to compensation for any inconvenience, loss or damage, arising from the protection works. If you have been served with Protection Works notices, or you consider you should have been, but have not, contact us for advice on how best to proceed.