With the Redlands being one of South East Queensland’s fastest growing areas, there are many homeowners entering into building contracts to build new homes or renovate.
The Domestic Building Contracts Act 2000 (Qld) requires all contracts for domestic building work to be in writing if the contracted work is for more than $3,300. There are a number of standard contract forms used by builders to meet the requirements of this legislation, namely Master Builders, HIA and Queensland Building Services Australia standard contracts.
When entering into a standard building contract, it is important that homeowners realise that:
- The standard contract terms are heavily favoured towards the builder;
- If homeowners are unhappy with the builder’s performance and want to terminate the contract, special attention needs to be paid to the terms of the contract, as if the contract is not terminated properly, homeowners can potentially be liable to the builder for all amounts payable under the contract; and
- Once the builder has completed all his obligations under the building contract i.e. completed the home or renovations, the builder is required to issue a Practical Completion notice advising the homeowner that the home is practically complete i.e. complete except for minor defects. The builder must also nominate a time and date for a defects inspection (an inspection of the property with you to have a look over the property and discuss defects). The builder is responsible for fixing all defects.
Terminating building contracts
In most standard building contracts, the contract provides specific steps homeowners must undertake before they are entitled to terminate the contract. In spite of these specific steps to follow, it is advised that you contact a lawyer before you terminate any building contract. Generally speaking homeowners must:
- Issue the builder with a Notice of Intention to Terminate. This notice is required to be in writing and must:
- Advise the builder of the complaints the homeowner has with the progression of the building contract i.e. failure to complete the building works within the time stipulated in the contract; and
- Provide a reasonable time in which the builder has to remedy the complaints.
If the builder does not respond to the Notice of Intention to Terminate, the homeowner is then entitled to issue the builder with a Notice of Termination terminating the building contract. After this Notice is sent, the homeowner is entitled to take possession of the property.
A homeowner however needs to be aware that termination of the building contract does not come without risk, as the builder could:
- Commence legal action against the homeowner claiming that the contact was unlawfully terminated and requiring the homeowner to pay the builder the remaining amounts owed under the contact; or
- Refuse to provide the homeowner with the various building certificates e.g. glazing certificate, foundation certificate, needed by the appointed building certifier to certify the building work as "complete".
Defects – Obligations of the builder
The builder is liable to remedy any defects in the home/renovation upon the building work reaching "practical completion". A builder must allow the homeowner the opportunity to attend a defects inspection for that purpose.
If a builder fails to comply with that obligation, there are many things a homeowner can do, one of which being to make a complaint to Queensland Building Services Authority and/or the Queensland Civil and Administrative Tribunal.
Who to contact in respect of building disputes
This article is only a brief overview of some of the vast array of issues a homeowner may have with a building contract they have entered into. To obtain further advice on any problems you may have, please contact Gemma Robson on 07 3370 5100
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