Dodgy Builder...

M

MTB

hi - my parents are building a townhouse in Caroline Springs - VIC - the builder has been SHOCKING. now, the property is supposed to be completed in a 24 month timeframe which from what i can gather is basically up. property incomplete.

what steps should they take? they have started their investment interests at a late stage of their life (60) and as far as i'm concerned they should be doing something about this. especially when it is eventually completed and ready for inspection (i'd be extremely picky).

anyway, legally - what should be their first step in dealing with the incomplete property?
 
Is there anything in the contract stating about going over time and compensation for this.

One of the other guys will know alot more as i am just going off what i have read from other threads on here.
 
The wording of the contract is key here. 24 months is a very long time. Why did you agree to this? Maybe you can upload a few of the key pages here so we can look and comment?

Oscar
 
I thought you meant 2-4 months... then realised its 24 months! As Oscar says thats a long build unless its a large complex.

Sounds like they got a cheap build based on an extended build time where the builder does work in between other jobs. Trouble is if the builder is busy and there are few slack days, not much will get done.
 
standard HIA contract would allow compensation to the you.

however they are clauses where they would put days off (for weather) purposes etc. Bear in mind weather in melbourne is not exactly great for building

Have you talked to your builder about this? and have you got the occupancy and final inspection signed off and the keys to the property?

if not agreement can be reached - then the tribunal would be your best option.
 
Hi,

Regardless of what contract it is there should be a liquidated damages clause and this is key. If there's no LDs then they'll be hard pressed claiming for the cost of time overruns. And HIA contracts are particularly worded in the favour of the builder.

You'll need to start by reading the contract and finding out if there's LDs allowed for. If there are then you can start to calculate what delays have been claimed through the build and add these to the contracted 24 months to find the approved completion date. If you're beyond this then you can claim LDs.

HIA contracts call for delay claims to be raised within 10days of the delay, so if there's none been coming in through the build then you might be in luck.

You can always call the DFT for a free chat on how to enfoce your rights.

Good luck,
Michael
 
Thanks everyone for the input - I've directed my dad to this thread so he can start looking into this. Will check out the contract with him later this week.
 
yeah so as it turns out the builder had the following in contract:

Build days: 130 (+ 100 days for 'bad weather/circumstances etc).

home is now 6 months behind due completion date and not answering calls of course...:eek:
 
Time to spend some money on a real contracts administrator to work for your interests. There will be clauses relating to definitions of delays, wet weather etc - the MBAV will have an inclement weather calendar upon which to base rain delays, the contract will also have timeframes for lodgement of delay claims, variations etc.

A client-side CA will sort out this mess quickly and efficiently.
 
MTB said:
yeah so as it turns out the builder had the following in contract:

Build days: 130 (+ 100 days for 'bad weather/circumstances etc).

home is now 6 months behind due completion date and not answering calls of course...:eek:
Click to expand...

Follow Scott's suggestion.

Otherwise, how were you required to be notified if EOTs? Have they followed the contractual procedures for notification?
 
It all depends on your contract length and if you've been informed of delays. If not then depending on how long you may be able to use the provisions in s41 of the DBC Act which provides that if the contract length has extended by more than 50% that you might be able to end the contract.

You'll need to get sou d advice before doing so.

Huss.
 
hi, thanks for all your input - my parents have followed up on this and there have apparently been delays caused by electricity etc that we weren't made aware of at all, builder has admitted he is 6 months overdue and owes them money/payments etc. so, we'll see where it goes from here.....

Thanks again everyone -

Matt
 
Your problem is if there is no start date, no-one can say when the 130 days is up. Your builder agreeing verbally is no progress whatsoever and he can string this out for another 130 days. I would be typing up some sort of agreement stating that he has admitted he is xxx days over contract, and what date he will finish and get him to sign it, otherwise this is standard delaying tactics. Friends were delayed 2.5 years with exactly this type of thing and then the builder went broke, leaving them with a shell.
 
fernfurn said:
Your problem is if there is no start date, no-one can say when the 130 days is up. Your builder agreeing verbally is no progress whatsoever and he can string this out for another 130 days. I would be typing up some sort of agreement stating that he has admitted he is xxx days over contract, and what date he will finish and get him to sign it, otherwise this is standard delaying tactics. Friends were delayed 2.5 years with exactly this type of thing and then the builder went broke, leaving them with a shell.
Click to expand...
Hi - thanks for your input. I do believe that everything is on paper - (i haven't actually gone over the contract myself) and that things may be starting to progress favourably. i agree with your last sentence 100% - last thing i want is for this small time builder to be over his head - pull the pin and go under...
 
The start date usually doesn't need to be specifically noted. It is generally the actual start date or two weeks after the building permit was issued.

Huss
 
G'day MTB,

Liquidated damages is the term used to describe a monetary sum that can be claimed from the contractor (builder) in the event that the building does not satisfy the definition of Practical Completion in the contract, by the adjusted contract completion date (does not finish in time). Such adjustments in time can be a result of things like weather delays, failure of the client to give the builder access to the site, delays by authorities in granting approvals, variations required or requested by the client involving critical path activities, failure of the client to provide information in reasonable time frames etc.

Liquidated damages are interesting in that they cannot be used as a penalty under contract law. For example, if the development in question was a single house for the value of say $300,000, having a liquidated damages amount of $5,000 per week stated in the contract would be seem out of context, because the cost of not receiving rent for the house would be substantially less that $5,000 per week, say no more than $700/week. Having a liquidated damages amount of $50/week would generally result in $50/week being claimed and paid if tested, because it falls within the figure that could reasonably be assumed to be the principal's (client) costs.

It gets better though....when there is no monetary sum stated for liquidated damages this opens up the principal to being able to claim reasonable and provable costs, such as:

1. Loss of rent / cost of alternative accommodation
2. Interest on lost rent
3. Mental anguish / loss of enjoyment
4. Extra site visits required during construction
5. Extra travel costs for daily activities

Glenn
 
HI Glenn, thanks for your input - that's very interesting.

it's still ongoing by the way, really driving my parents mad. he's obviously struggling somewhere but he's not really coming clean on the delays. will continue to investigate....

Matt
 
OMG, so this still continues! The builder has apparently washed his hands of it and his father (also a builder) has taken over.

the father actually answers his phone...that's a plus. the f**king townhouse is 1 year + overdue and my mum has since lost her job! stressed much?
 
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