The importance of claiming extensions of time

What can you claim an extension of time for?

Under the HIA NSW New Dwellings, Cost Plus and Renovations and Additions contracts, an extension of time may be available wherever the delay is:

• caused by something beyond the builder’s sole control, and
• was not reasonably foreseeable at the time the builder entered into the contract.

If circumstances arise outside of your control, you should seek an extension of time in writing as soon as it occurs to reduce the risk of a claim for liquidated damages. Whilst some examples of relevant circumstances are provided in a list within the HIA NSW contracts (e.g. adverse weather and industrial disputes), this list is non-exhaustive and many possibilities exist. For example:

• your client has requested variations to the building works;
• there has been a delay in receiving materials that were to be supplied by the owner; and/or
• you have had to suspend the building works due the client failure to pay a progress payment when it was due.

When you cannot claim an extension of time

You generally cannot claim an extension of time for any delays you could have reasonably predicted before entering into the contract. For example, the industry shutdown during the Christmas period (unless other delays have occurred, and it could not have been reasonably foreseen that the building works would last until the industry shutdown).

How to claim an extension of time

It is important that you familiarise yourself with the process in your contract.  

Under the HIA NSW Contracts, to claim an extension of time, you must:  

• provide the owner with a written notice for an extension of time detailing:
  • the reasons for the delay; and
  • the extension of time.
• ensure that the notice is provided within 10 working days of when you became aware of both the cause and the extent of the delay.

If you do not claim the extension of time in accordance with the contract, you may be unable to rely on it. This means you may be liable for any liquidated damages if you do not complete the building works, as per the contract’s building period.

The homeowner is disputing an extension of time – what should you do?

If the homeowner wishes to dispute an extension of time, they must provide you with a written notice within 5 working days of receiving your extension of time claim, outlining why they dispute it. If the homeowner continues to dispute your claim, there are 2 options:

• provide evidence to support your claim. For example, economic information or correspondence from suppliers may help convince a client that the delay was not foreseeable at the time of signing the contract; and/or
• refer to the Dispute Resolution clause in your contract.

The above is intended to provide general information in summary form. The content does not constitute specific advice and should not be relied upon as such. Formal advice should be sought by members and customers with respect to particular matters before taking action.