Browse Forums General Discussion 1 Sep 13, 2012 11:27 am Hi, I've got a few questions in regards to HIA contracts but here is a bit of background first. We signed a HIA contract (2009 version) with the builder for some additions at the front and back at the house in early March 2012. The builder stated that this will reach practical completion within 16 weeks. So in theory, given the extra time indicated in the contract to allow time to get building permits etc, the job should have been done by end of July/early August. Since we think that the job is relatively straight forward job and not that big (no demolishing, easy access etc) and the time frame is ok, we didn't think to include penalty for when builder go over time - our mistake!. As of early sep 2012, it's been 7 months since we signed the contract and the job is only 1/3 complete (at most) since there were some delays with getting permits and a bit of bad weather earlier this year etc but this all should been accounted for by the builder. The questions are: 1) Since the contruction certificate was issued right at the end of May 2012, is it correct to assume that the max allowable finished date starts 20 days from then (according to one of the clause which allows this grace period)? 2) If we are already well outside of the alloweable time for the builder to complete the job (even given delays or time to get permits), does that mean the contract is still valid?? The HIA clauses are not clear in terms of what happens after the proposed period of work. 2) If not, are we still bound by the terms of the contract or we need to sign for another contract? 3) if still valid, is it possible to apply the penalty? 4) any suggestions who I can ask these kinds of questions? especially just clarification of the contract at this stage (preferably free). I don't know if it's covered anywhere else here but it's really difficult to talk to someone from HIA to ask any questions . It seems to me that HIA contract is very much pro-builder and not so much owners (they charge you ~$3/min to talk on their consumer help line!). thanks. Re: HIA contract question 2Sep 14, 2012 1:03 pm A couplel of questions need to be answered first from you. You say 16 weeks, so I assume the contract startes 112 days inclusive o fdays for inclement weather, weekends and "other days" please confirm/clarify These are not hard evidence answers but I think they should be pretty close: MT731 1) Since the contruction certificate was issued right at the end of May 2012, is it correct to assume that the max allowable finished date starts 20 days from then (according to one of the clause which allows this grace period)? The time allowed is 20 days after the permit is issued where it is issued within the allowed time frame. There should be a number of days specified to obtain the required permits (30days is the "standard") Where the permit is isssued within the allowable time the number of days to complete starts at the first day any works begin on site. Even if the builder brings a brrom to sweep the floor before he starts, thats the day you measure from. In this case, if the contract is dated 31st March(date contract signed) and they had 30 days to get the permit and used all 30 you would measure the 112 days (see above) from and including the first day the builder showed up or 21st June, whichever came first. That day would have been 9th September 2012 If you measure from 31st May(date of permit issued, where the delay to get teh permit is acceptable) then 20days from that day to start get you to 10th October 2012. MT731 2) If we are already well outside of the alloweable time for the builder to complete the job (even given delays or time to get permits), does that mean the contract is still valid?? The HIA clauses are not clear in terms of what happens after the proposed period of work. The contract is still valid until you end it, the builder ends it or the work is finished. Only the permit can expire. The builder is required to request in writing extra days where they were not allowed and you are required to respond in writing. HTere is a process on how they are to request and I assume you have recieved no such request. MT731 3) If not, are we still bound by the terms of the contract or we need to sign for another contract? You are still bound, as is the builder MT731 4) if still valid, is it possible to apply the penalty? IMO the contract is still valid, only the commencement date needs to be clarified. The builder appears to not have applied for extension days to be added and therefore you should be able to with hold $250 per full week or part there of from teh final payment as stated inteh contract(there is always a minimum amount and in new homes its $250, check yours) MT731 5) any suggestions who I can ask these kinds of questions? especially just clarification of the contract at this stage (preferably free). I don't know if it's covered anywhere else here but it's really difficult to talk to someone from HIA to ask any questions . It seems to me that HIA contract is very much pro-builder and not so much owners (they charge you ~$3/min to talk on their consumer help line!). Free help is hard to find. Yes the HIA contract are very much to protect teh builder. Personally I will not be using an HIA contract next time if I can get around it. Plain language drawn up by a lawer will be much better for owners but hard to get a builder to agree. Where to go for help depends on what state you are in. Re: HIA contract question 3Sep 14, 2012 2:25 pm THanks for the reply Chrisandkate! Just to answer a few of your questions. 1) yes, I assume the 16weeks is inclusive of inclement weather, etc. In the HIA contract this is rather vague as this period is part of an Item which effectively says that the builder must reach practical completion no more than 16 weeks after contract period commences (clause #8) and subject to clause #9. (clause #8 - essentially says that builder must commence within 20 WORKING days after getting the permits) (Clause #9 - builder is entitled to extension of time under X number of circumstances (e.g. bad weather, act of God etc, but to do so he needs to request this in writing). 2) So as far as the commencement date, if the permit was granted on the 31st of May, in theory builder needs to start by at least the 28th June, (so I assume that is when 16wks start) so completion would be somewhere in the 3rd week of Oct. It looks like my calculation is similar to your examples except I've accounted for Working days. Yes, you are right that the builder has not given me any request for any time extension at all so far. Since Clause 9 states that he needs a request for extension I guess he's still bound by the 16wk what he had in the contract ??!! Right?? And if he goes over this I assume the builder is in breach of the contract??! 3) As for penalty I think the problem like I stated in the original post is that we didn't impose one in the contract. There is no 'automatic penalty' at least in the version of the HIA contract that was used. Although it's a moot point, I don't know whether I can re-instate a penalty or not. I suppose my main question if the builder is in breach of the contract, what are our options? Given there is no penalty, I take it the builder can just say "well, what are you gonna do about it?" cheers Re: HIA contract question 4Sep 14, 2012 4:09 pm Hi MT731 Just to help you along: Firstly there are no contract penalties, it is called damages or liquidated damages. Penalties are for criminal cases or for fines. Purpose of liquidated damages is to allow for agreed rate of deduction from contract sum if builder is in breach of contract regarding time of construction. If liquidated damages are not stipulated in the contract it means you cannot have automatic deduction. However it does not mean that builder is not liable for damages, it just means you have to go to VCAT or similar and you have to prove your claim and your loss. ( it costs money and time to go to VCAT ) There is nothing to stop you from inserting special conditions into standard HIA contract to protect your investment but many people don't think its necessary to spend $500 on pre contract consultation and good advice, so it costs them thousands more instead and a lot of sleepless nights. That's life. Perhaps next time you build you might consider it. More info on: http://www.buildingexpert.net.au/new-home-sign.htm Foremost Building Expert in Australia,assisting with building problems/disputes, building stage inspections,pre-contract review advice for peace of mind 200 blogs http://www.buildingexpert.net.au/blog Re: HIA contract question 5Oct 21, 2012 8:52 am the law in victoria will allow you to end a contract if the build time is excessive. bit hard to say with what you provide but domestic building contracts are covered for this possibility. ask me if you need help. cheers Re: HIA contract question 6Oct 21, 2012 9:54 am leighton the law in victoria will allow you to end a contract if the build time is excessive. bit hard to say with what you provide but domestic building contracts are covered for this possibility. ask me if you need help. cheers Leighton is only partly right and it could be misleading for you: Statutory right to end building contract has nothing to do with contract. Yes there is statutory right to end building contract but only if the builder has exceeded build time by one and a half times. Has he? There is a contractual right to end the contract for "substantial defects" but notices have to be given and procedure followed for it to be done correctly. If you don't have liquidated damages in the contract you can still recover damages for late completion but instead of automatic deduction form last payment to the builder you will have to prove your loss in VCAT. So for example,if you have been staying with parents while you build and have not been paying rent, bad luck! Foremost Building Expert in Australia,assisting with building problems/disputes, building stage inspections,pre-contract review advice for peace of mind 200 blogs http://www.buildingexpert.net.au/blog You talk about deletions, are they variations or PS and PC adjustments? pleas list them 1 12031 10 9785 Unless there is something in special conditions the builder does not have to give you timeline. If your demolition contractor has not removed Asbestos and it was found… 12 22627 |