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The HomeBuilder grant has exceeded all expectations. HIA is aware that this increase in building activity is leading to delays in both the supply of labour and materials.
There will be three stages during a residential building project when you might need to consider how to respond to delays:
Each stage will present different challenges and, if you do not factor in or respond to delays, you may be liable to compensate your client.
Ensure you have adequate time under your building period for the completion of the building project. This may mean that you need to:
While the current level of interest and activity is appealing, and you don’t want to ‘miss out’ on work, making sure you can deliver on what you commit to should be a priority.
This is particularly important given the current requirements regarding commencement timeframes under the HomeBuilder grant.
When assessing your current workload and future commitments you should consider:
Once you have signed the contract you have entered into a legally binding agreement.
Any changes must be made strictly in accordance with the contract.
Under the New Dwellings contract you must commence building work within 15 working days of the owner providing all of the essential information listed in clause 4 of the contract.
The owner has 30 working days after the contract is signed to provide this essential information. Essential information includes, for example evidence of ownership such as certificate of title to the site and the necessary building permits and planning approvals.
If an owner or builder (depending on who is responsible for building and planning approvals) does not fulfil their obligations, then either may end the contract by written agreement or by sending the other a written notice by certified mail or personal service under clause 25.7(c) of the contract.
Under the Alterations and Additions contract you must commence building work within 15 working days of the owner providing all of the essential information listed in clause 4 of the contract.
The owner has 90 working days after the contract is signed to provide this essential information.
If an owner does not fulfil their obligations within 90 days, clause 4.2 of the Alterations and Additions contract provides that a builder may give the owner written notice to end the contract.
If the builder ends the contract, this would allow the builder to retain the deposit or an amount calculated in accordance with clause 25.8, whichever is the greater.
In addition, either party may also end the contract by written agreement or by sending the other a written notice by certified mail or personal service under clause 25.7(c) of the contract.
Delays during construction can be frustrating and cause tension.
They can also lead to disputes.
Being aware of your rights and obligations regarding extensions of time is critical.
An extension of time may be available if the delay is:
There is a non-exhaustive list of what may constitute an extension of time under ACT HIA contracts.
To claim an extension of time you must:
If you do not claim the extension of time in accordance with the contract, you may be unable to rely on it.
Generally you cannot claim an extension of time for delays you cause or a delay that was reasonably foreseeable at the time the contract was signed.
HIA contracts require the homeowner to not unreasonably refuse to approve an extension of time.
If the homeowner disagrees with the extension of time, you have 2 options:
HIA has extension of time documents available through HIA contracts online.
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