The building period (Vic)

This information sheet deals with the concept of the commencement date, extensions of time and suspension of works under the HIA contracts New Homes, and Alterations, Additions and Renovations.

What is the ‘building period’?
This is the construction time set by the builder to carry out the building works under the contract. Item 1 Schedule 1 of the HIA contract/s sets out estimate time for completing the building works together with an estimate for any delays during the course of construction. The estimates for time delays are included in the overall building period. The following are the types of delays included in the contract:

• Inclement weather
• Weekends
• Public holidays
• Rostered days off
• Builder's holiday close down period; and
• Other foreseeable delays

Note- Section 32 of the Domestic Building Contracts Act 1995 requires the inclusion of these estimates.

Definitions
The following is a list of basic definitions and tips to assist you in determining whether any delays have occurred in the building period:

Inclement weather
This is defined in the National Building Industry Construction Award as:

“21.4 Definition - inclement weather

…the existence of rain or abnormal climatic conditions (whether they be those of hail, snow, cold, high wind, severe dust storm, extreme high temperature or the like or any combination thereof) by virtue of which it is either not reasonable or not safe for employees exposed thereto to continue working whilst the same prevail.”

Basically, if the weather prevents you from proceeding with the building work then it may cause delay in completing the building works within the building period. You are entitled to claim for the period of inclement weather together with the effect of that weather – for example drying out time after a rainy day.

Rostered Days Off
We recommend you make the owner aware of when these dates fall due. To obtain an RDO calendar you can contact the HIA Information Centre or refer to enterprise agreement (if you have one). If your employees are entitled to take RDOs, you should factor them into the building period.

3.  Other foreseeable or reasonable delays having regard to the nature of the building work

HIA contracts refer to those delays which are foreseeable or reasonable to you (and not the owner) at the time the contract was signed. An example would be where you know that there will be a shortage of bricklayers. If it is not possible for you to adequately estimate the period of a particular likely delay, then it will be sufficient if you write into the contract:

• that it is not possible to identify the likely duration of that delay; and
• what that likely cause of delay will be: section 32(3) of the Act.

When does the date of building works commence?
Under clause 10, there is an obligation to commence building works within twenty one (21) days of receiving the building permit.

By clause 4, the building period for building works starts on the actual day that works commence onsite.

Delay in completion of building works
At times, there may be delays in completing the building works within the building period. When building works are delayed, you may have a right to an extension of time - see clause 34 of the NHC and clause 37 of the Alterations, Additions and Renovations Contract (October 2004 version).

When is a builder entitled to claim for an extension of time?
A builder is entitled to an extension of time of the building period in the following circumstances:

• a variation to the building works;
• a suspension of work;
• inclement weather (causing a cessation in the building work) over the number of days as specified in Schedule 1);
• disputes or proceedings (which are not your  fault) and involving neighbouring owners  or residents;
• a civil commotion/industrial dispute which affects the tradespeople involved on the building site or the manufacturers/suppliers of materials to be used on site;
• any act/omission by the owner or the owner's employee  relating to the building works;
  any delay in the obtaining of an approval (as long as its not your  fault); or
• any thing else which is not your  fault and which causes the building works to be delayed.

An extension of time extends the building period - the date for completion is correspondingly postponed or deferred.

How can a builder claim for an extension of time?
A builder can claim for an extension of time by giving written notice to an owner. An extension of time notice should include the following information:

1. The period of time claimed for the extension of time, for example, 10 days.
2. Reason/s for the extension of time. For example, a variation to works, a suspension of works,  inclement weather, owner/s delay or circumstances beyond the builder control. Any document  supporting the reasons should also be included to show the owner that the entitlement is genuine.
3. The owner/s name, address along with the job address.

Please contact HIA Stationary for pre-printed ‘Notification of extension of time’ forms.

Disputes and extensions of time
An owner has 7 days to dispute an extension of time after receiving the builder’s EOT notice.  If the owner disputes the claim they must do so in writing and include detailed reasons why they are disputing the claim.

It is prudent to communicate an extension of time in accordance with the terms of the contract as soon as being aware of a possible delay. All documents and records of telephone conversations should be kept in the event a dispute is ever referred to the Tribunal.

Delay damages
If an EOT is caused by anything done (or not done) by the Owner or an agent, contractor or employee of the Owner, then you are entitled to delay damages worked out by reference to the period of time that the Building Period is extended. Item 12 Schedule 1 of the HIA contracts allows for a default penalty of $250.00 per week (or other amount as agreed between the parties) to be charged by a builder to an owner that has caused delay.

Liquidated damages
If you do not finish the building works by the completion date, even after all extensions of time have been taken into account, then the owner will be entitled to claim an amount of money which is known as "liquidated damages" or "agreed damages" from you. See Schedule 1 item 9 of the HIA contracts.
How can I suspend contact works?

Step 1 - Entitlement to suspend
Under the HIA contracts, a builder is entitled to suspend works under the contract in the following circumstances where the owner:

• has failed to make a progress payment by the due date; and/or
• is in breach of the HIA contract. An example of such a breach is the owner takes possession of the land without your prior written consent.
• The right to suspend is not the same as the right to end the contract and should be treated separately. If you suspend the building works, then you are also entitled to claim an EOT.

Step 2 - Written notice
If you suspend, you must immediately give notice in writing by registered post to the owner.

Step 3 - Remedy of Breach
The owner must remedy the breach within 7 days after receiving the notice.

Step 4 - Building works are re-commenced
The builder must recommence the building works within 21 days after the owner remedies the breach and gives notice of this to the builder.

Date of completion of building works
The date on which the building works are to be completed is changed and extended to cover the period of extension.

For more information call the HIA member Hotline on 1300 650 620

_{DISCLAIMER – the above is intended to provide general information in summary form. The contents do not constitute specific adive and should not be relied upon as such. Formal specific advice should be sought by members with respect to particular matters before taking action.}