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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:
Most contracts provide for a homeowner to be compensated if there are unjustifiable delays during the project.
Under the contract you and your client can agree to this amount.
If you do not, a default amount may apply OR if no amount is specified and there is a dispute, a court or tribunal may determine the appropriate amount.
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 within 20 working days of the homeowner fulfilling a number of obligations (such as evidence of land title and a number of other requirements).
If a homeowner does not fulfil their obligations within 20 working days of the date of the contract, clause 10.1 provides that a builder may end the contract or extend the time for the homeowner to fulfil their obligations.
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 caused by:
There is a non-exhaustive list of what may constitute an extension of time under the 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.
A homeowner may dispute an extension of time.
To dispute the claim, a homeowner must, within 5 working days of receiving the extension of time, provide a written notice to the builder disputing the claim and detailing the reasons why the extension of time is disputed.
Where a homeowner disputes a request for an extension of time, there are 2 options:
HIA has extension of time documents available through HIA contracts online.
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