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Contract complications

A legally compliant kitchen and bathroom contract from HIA can protect your business if problems or delays occur.

Author

Melissa Adler

Renovating a kitchen, bathroom or laundry can be an exciting and emotional time for a homeowner. Choosing the right builder and the right products and finishes is very important. But finding the right contract is vital, and HIA can help. HIA can offer advice, as well as a suitable contract.

Once the plans are finalised, there can be pressure to finish the project quickly. Homeowners also often expect the builder to use specific materials to create that perfect kitchen or bathroom. In some cases those materials may even be supplied by the homeowner themselves.

To add to the complexity, renovating a kitchen or bathroom will often require the builder to share the site (a home), with the homeowner. Having a clear understanding of how these interactions will work and the associated expectations is vital to ensuring that the job goes smoothly.

With this pressure, complexity and emotion in mind, members should protect themselves and the homeowner by using a compliant contract.

The HIA Kitchen, Bathroom and Laundry Contract has been developed in each state to ensure compliance with the law and to also reflect industry best practice.

The contract is an easy way to ensure that:

• the correct deposit is charged
• the contract period is clearly defined
• progress stages are set out in advance
• the process for variations and time delays are prescribed
• the expectations in relation to the access to and use of facilities in the house are clear
• if things go irrevocably wrong, there is a clear process for suspending and/or terminating the contract.

Once the plans are finalised, there can be pressure to finish the project quickly

The states and territories have different requirements for deposits and progress stages:

Queensland 5 per cent of the contract price if the contract price is more than $20,000
New South Wales 5 per cent of the contract price if the contract price is more than $20,000
Victoria 5 per cent of the contract price if the contract price is more than $20,000
South Australia $1,000 plus third party outlays if the contract price is less than $20,000
Tasmania 5 per cent of the contract price
Western Australia 6.5 per cent of the contract price if the works are over $7,500 but less than $500,000
Australian Capital Territory No regulated deposit amount, however industry standard is 10 per cent
Northern Territory 5 per cent of the contract price

It is vital to have a compliant contract in place.Recent crackdowns by regulators in some states have meant that kitchen and bathroom builders who did not have compliant contracts received significant fines. Builders who use one-page documents or rely on a signed quote are not acting in accordance with the law, because they do not offer a ‘Contract Information Statement’ or a warning about cooling off periods.

Various court and tribunal decisions demonstrate the importance of having contracts in place. For example, in a recent case involving a builder not being paid and being excluded from the site, the homeowner had to pay the builder all outstanding monies plus the costs of suspension, because the owner had not lawfully given a Notice to Remedy Breach as required by the contract.

A HIA kitchen and bathroom contract is an easy way to ensure that you are compliant with the laws of your state.

For any further queries contact HIA’s Workplace Adviser team on 1300 650 620.

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