Building Contract Pitfalls

[kay]

Hi,

We are currently reviewing a contract for a new house we are going to have built on some land we have bought. Would anyone have seen in their web travels a site that looks at common pitfalls/things to look out for in building contracts, from the owners' point of view?

We have some info from the Master Builders' association and understand that the best bet is a solicitor, but would also be interested if there are any 'self help' options out there too.

Many thanks,
Kay

 

[keithj]

Penalty causes

Make sure you have significant penalty causes for late completion. And make sure you record any rainy/other excuse days.

 

[Lplate]

BSA Building Contract

The Master Builders and the HIA are the builders 'unions'.

You need independent advice. Go to the BSA site for advice and use the BSA contract. Any ethical builder will agree to use the BSA contract, after all their 'unions' were consulted in its drafting. BSA

There is a most unfortunate culture in the building industry which you can't overcome and there isn't the political will to fix. So choose the builder well from advice from people YOU know - not from recommendations they (builder) have obtained; get advice from the BSA (go and see them if you wish in Sth Bris)and use the BSA contract.

I think it is prudent to have someone like Archicentre check the specifications if it is a bigger house.

 

[Sunfish]

My mistake was in not deducting my expendature on cabinets, tiles, lights etc from progress payments so that the final payment was too small to convince the builder he should "finish" the house before he went up the Gulf fishing. I was forced to accept it as it was. Defects 'n all.

The moral is to ensure you withold enough to enforce performance.

T

 

[whitt]

keep on top of any defects you notice on the way. and iron out a good late completion payment

 

[Lplate]

keep on top of any defects you notice on the way. and iron out a good late completion payment

whitt
The problem with the building contract law is that there is very little you can do about shortcomings in the building whilst it is in progress and builders know this.

You will find for instance that there is nothing to enforce the Building Code or the relevant Australian Standards. It surprises many owners that this stuff is only advisory(!!). Likewise, recommendations by manufacturers for the installation of their products are often not read or complied with. Practically speaking, there is nothing to enforce compliance with the Code or the Standards. Even if the owner specified compliance with a particular Standard in the building specifications and the builder did not comply, there is bugger all you can do to force rectification. Ultimately, the builder can do what he likes and some do.

Also, the inspections by the Council (and often by the engineer too) can be cursory to say the least.

Further. the owner has to make all progress payments, without deduction otherwise the owner is in breach of contract.

Realistically, it is only after paying for practical completion that the owner can seek rectification of defects, because up to then the builder will claim that building is still in progress.

This is why you have to put the hard yards into finding a reliable builder in the first instance and also why you need to use the BSA contract. IMHO even the tightest contract and specifications cannot guarantee an acceptable end product because any builder who wants to short-cut (or increase margins through variations) has plenty of ways he can do that with impunity. A better contract etc, gives some possibility of remedy for some of the really abusive practices, but only after the building has obviously failed within the warranty period.

Regarding the last point, you can photograph a tiler laying tiles in a shower without adequate waterproofing, but you cannot do anything about it until the water seeps through the sub-floor during use. Logically an owner would expect that tilers are required to follow the Australian Standard. Why do our taxes go into drafting Standards that are not mandatory minimums for practice?!

It sucks that good tradespeople get undercut by rogues and that some builders encourage subbies to undercut. Likewise it sucks that State politicians are not more interested and do not give BSA inspectors more flexibility - but then I suppose that more people should contact them direct to complain.
Lplate

 

[Sunfish]

Scarry when you put it that way Lplate.

BTW you've passed and can get a full licence.

T

 

[willair]

Kay,
something else you may want to look at,workers compensation
are all independent contractors covered by workcover in the contract,
and is the contractor liable for negligence for his or hers workers on site or off.

good luck
willair..

 

[Macca]

Hi Kay,

In my opinion, most contracts are similar, they favour the builder in their vagueness. The building industry makes the real estate industry look like a gathering of angels. I know of people who have waited 15 months for a simple brick house to be finished.

When we had our house built, we found that while the office seemed genuine the site supervisor was hopeless. Fortunately we were able to visit regularly as we were doing the painting and by using the web to chase up manufacturers specs I was able to get a better job. If we had not been here I honestly believe my new house would need major remedial work by now (4 years old).

I do have a basic knowledge of buliding so I was able to comment, "are sure that is right?" and then check that night and complain the next morning until they fixed it.

I found that about half of the tradesmen intended to deliberately take shortcuts which would have caused major problems in the future. They really did not care about anything except finishing the job ASAP. The other half were quite good and have used some of them since in other work.

If you are able to, I strongly recommend that you visit the site as often as possible, daily is good , if you are not confident then employ a building inspection service to call regularly, I would have them call at least once week. You should be able to do a deal with them for the whole job............... they need to inspect before things are hidden, eg: inspect plumbing before they pour the slab, check termite proofing before slab..... insulation before sheeting put on walls etc.

If the site is not near you I would even consider an architect to inspect for you.

Unfortunately Kay, as is so often mentioned in the news and ACA, the industry is home to some very unethical people, try and find someone who is recommended by a happy customer, with the right builder it is a lot of fun and can be quite profitable in the long run.

Good luck !!