December 17, 2020
Have you entered into a domestic building contract without obtaining foundations data? This can have significant implications.
The increasing pressure to sign contracts as soon as possible in order to secure work is something many within are experiencing. However, having a contract signed prior to obtaining foundations data could end up being a costly mistake.
What is foundations data and when is it required?
Foundations data is the information relevant to a building site that a building contractor requires in order to prepare a footing and/or concrete slab design for the building site, and also to establish the cost of the foundations component of the works.
Generally, foundations data is required if the works are being carried out under a domestic building contract and:
require the construction or alteration of footings, or a concrete slab for a building; or
may affect the footings of a building or concrete slab already on the site i.e. extension to an existing dwelling.
The foundations data should identify and consider:
the Building Code of Australia;
whether a drainage plan is needed;
whether engineer’s drawings are required; and
whether information on the fall of the land on the site is needed.
Failure to obtain this information prior to entering into a contract carries a hefty fine and four demerit points. An additional fine and two demerit points also applies for failing to provide the foundations data to the client.
Are there any exceptions?
Foundations data is not required to be obtained prior to entering into a contract where:
a building contractor is not lawfully able to enter the land at the building site to obtain foundations data prior to entering into a contract; and
the contract guarantees that there will be no increase in the contract price because of the foundations data.
This is most common where the building site is located within an ‘off the plan’ development and the developer refuses access to the site. Consideration of the contract price and the risk of engaging in such a job should be made prior to signing the contract in these circumstances.
If you obtained foundations data can you charge additional costs if an unexpected discovery occurs onsite?
Where a building contractor obtained the relevant foundations data and has hit rock or experienced other difficulties that were unforeseen, they may have the ability to pass the additional costs incurred onto the client. This contractual right only arises where the building contractor has obtained the relevant foundations data prior to entering the contract and the need for the additional amount cannot be established from the foundations data obtained.
Can the costs of obtaining foundations data be charged prior to signing the contract?
Yes. A Preliminary Agreement (such as a HIA Preliminary Agreement) allows for foundations data and other preliminary tasks to be priced and claimed for on demand before entering into a formal domestic building contract.
As unexpected site conditions can often result in significant additional costs, it is strongly recommended that you take the required steps to ensure you are entitled to payment for such price increases.
Contact a HIA Workplace Adviser
1300 650 620
or email firstname.lastname@example.org