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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 HIA contract you must commence building work:
If an owner does not fulfil their obligations by the anticipated start date, clause 2.2 provides that a builder may end the contract or extend the time for the owner to fulfil their requirements.
You may increase the contract price if commencement has been delayed:
The price increase may be the reasonable costs incurred because of the delay, or 0.125 percent of the contract price.
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 HIA contracts.
To claim an extension of time you must:
Once you receive the approved extension of time, a signed copy must be given to the client within 5 working days.
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 a homeowner, if they wish to dispute an extension of time claim, to provide written notice to the contractor within 5 working days of receiving the contractor’s extension of time notice. The homeowner’s written notice must:
HIA contracts require the homeowner to not unreasonably refuse to approve an extension of time.
BUT if the homeowner continues to refuse you have a few options:
Information published by the Queensland Government on residential building material and labour shortages may assist when discussing these issues with you clients.
HIA has extension of time documents available through HIA contracts online.
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