HIA Contract Clause 16.2 Delays to Carrying Out the Works Af

Huynhm3 · Nov 15, 2023 6:53 pm

Hello!

Can someone please advise me this Clause 16.2?

My builder is giving me a large variation due to our site having absestos after site cut, We had to organise things immediatly, was around 2 weeks.
He has given me a 21K variation based on this clause? but we have not started anything but site cut, no actual cost has been provided, no actual delays has caused any issues. He has recharged me for any costs with absestos and now he has given me this.

Two weeks earlier he asked for an extension for building time due to survey.
Why is it okay for him to extend and I didnt get a chance to extend.

I find this unbelievable and disappointing. Can someone please help me? I am stressing

Thank you,

Miki

building-expert · Nov 15, 2023 9:26 pm

which state are you building?
Without knowing your contract clauses, generally if the variation price has not been agreed beforehand then the builder has to provide evidence of cost to which builders margin applies.
It seems this is just the start of your problems, unless you push back this will just be one of many tests.
You should get independent building consultant to look after you and to carry out independent stage inspections

Huynhm3 · Nov 15, 2023 9:56 pm

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Huynhm3 · Nov 15, 2023 10:05 pm

Huynhm3

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The builder has not done any work but site cut. I tried to call him to negotiate . What is the definition of commencement? There is an ambiguity around this terminology.

The builder has not provided actual costs, but went with the clause and went with the higher cost 0.0125% daily. We don’t have the money to pay for this and I think this is really disappointing and unfair for a consumer when they havnt actually physically done the work

Commencement is defined as being when the builder commences physical construction on site of the footing, slab, or drainage system, or when work to change an on-site fixed structure has physically commenced.
This was on the HIA website .

I feel so sick and tired of this build that I want to see if I can terminate by mutual agreement.

Pedro4137 · Nov 16, 2023 6:29 am

How have YOU caused delay?

Ashington Homes · Nov 16, 2023 7:00 am

Huynhm3

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The builder has not done any work but site cut. I tried to call him to negotiate . What is the definition of commencement? There is an ambiguity around this terminology.

The builder has not provided actual costs, but went with the clause and went with the higher cost 0.0125% daily. We don’t have the money to pay for this and I think this is really disappointing and unfair for a consumer when they havnt actually physically done the work

Commencement is defined as being when the builder commences physical construction on site of the footing, slab, or drainage system, or when work to change an on-site fixed structure has physically commenced.
This was on the HIA website .

I feel so sick and tired of this build that I want to see if I can terminate by mutual agreement.

This is appalling!

We need to name and shame builders who act in this way

Ashington Homes · Nov 16, 2023 7:00 am

Huynhm3

Like ⋅ Add a comment ⋅ Pin to Ideaboard ⋅

The builder has not done any work but site cut. I tried to call him to negotiate . What is the definition of commencement? There is an ambiguity around this terminology.

The builder has not provided actual costs, but went with the clause and went with the higher cost 0.0125% daily. We don’t have the money to pay for this and I think this is really disappointing and unfair for a consumer when they havnt actually physically done the work

Commencement is defined as being when the builder commences physical construction on site of the footing, slab, or drainage system, or when work to change an on-site fixed structure has physically commenced.
This was on the HIA website .

I feel so sick and tired of this build that I want to see if I can terminate by mutual agreement.

This is appalling!

We need to name and shame builders who act in this way

building-expert · Nov 16, 2023 7:12 am

On the limited information you provided it seems to me that the builder carried out site cut, that is building work and definitely commencement on site(cutting site to provide drainage toe), then asbestos was found and there was either extra cost or delays or both.

You will not get specific answers to your questions on this forum for complex matters, only good guidance. Someone experienced needs to look at all the circumstances and then advise you of the validity and quantum of builders claim.

I have already posted good guidance for you

ponzutwo · Nov 16, 2023 8:36 am

Hi, Huynhm3

The answers you are after are in the contract and in the order in which the events occurred and the events that haven’t occurred.

Site cut is commencement. Commencement is defined in your contract, usually as when “building works" begin or language to that effect. Site cut is also the industry accepted benchmark unless specified differently in the contract.

Variation claims that it is due to clause 16.2?
Well.....

the works ARE delayed after commencement, however under 16.2 they have to be due to a CLAUSE that YOU are responsible for. What CLAUSE does the builder claim you are responsible for?

16.2 is a nested statement of at least two clauses (or more) and the builder is just providing you a variation based on the first clause in the nested statement (this tells me the builder may have an extra chromosome).

You need to find the part (or parts) of the contract that define which clauses you are responsible for. These are typically related to things like site clean before builder commences works etc. there may be one or two or many. We don’t know. Check your contract and specifically your special conditions.

The rest of the argument is going to be around whether those clauses apply. If they turn around and say you were responsible for cleaning the site as per claus XYZ, and you did. You need to identify what the definition of the site clean entailed or what it was defined as in the contract.

In mine it was defined as such: The Owner is to arrange for the removal of all long grass, shrubs, weeds, fences that impede construction, debris, spoil, rubbish, paving, redundant services, sheds and outbuildings, to the satisfaction of the Builder prior to construction taking place.

You might look at this statement and think you’re screwed, because “spoil or debris or rubbish” could all relate to the asbestos that was uncovered during the site cut. HOWEVER, I would argue that that particular clause defines that the builder would NOT commence unless satisfied that that clause had been met. Therefore, by starting the site cut, the builder ACKNOWLEDGES that that they were satisfied the clause was met. Theres no take backsies.

Other clauses may apply AFTER this and are usually related to unforeseen events etc. Similar to when a builder is not expecting to encounter rock, but then does. You would be expected to pay for the rock removal, or the provisional sum might be used, and a minor delay added to the contract build time. Etc. That aspect would have been considered unforeseen and therefore not something one could be responsible for prior to the event occurring. One would assume under this situation that the builder would at most be able to claim an extension of time due to the additional removal of asbestos and the removal cost, not costs associated with the delay as well because 16.2 thresholds arguably have not been met..

AT MOST, in my opinion, you should counter with an extension, the length of time it took to clear the asbestos and certify the site as safe for the builder. If you were generous, you could also provide the builder the additional time you were arguing over the variation, however I wouldn’t, because on face value it looks like delay was caused unreasonably by the builder trying to get one over you with a BS claim that has no basis in their own contract.

All of this is based purely on the sections you have provided and the info in your post. I could be of the mark if there are other clauses in your contract that need to be read in tandem.

So next step is ask the builder to provide the CLAUSE which they are referring to that you are responsible for which they are claiming under 16.2. Go from there.

SJT76 · Nov 16, 2023 9:18 am

Excellent post ponzutwo, and especially impressed by your use of "no take backsies" in legal argument!

ponzutwo · Nov 16, 2023 9:26 am

SJT76

Excellent post ponzutwo, and especially impressed by your use of "no take backsies" in legal argument!

haha thanks,

i was wondering if that would make somone laugh.

Huynhm3 · Nov 19, 2023 5:27 pm

Thank you all for the responses. One of the email he sent me was "UNFORSEEN CIRCUMSTANCES" as the title then sends me a variation for daily cost of the delay. I asked him what was the incurred costs, he goes holding cost for windows and frames. Those stages are in next year. he paid suppliers 100K already so thats part of the daily cost of the delay.

We also paid for the removals of absestos and any incurred cost related to this as he said it is part of the home owner repsonsiblity due to the unforseen event of absestos found underneath digging. He has not put any money out or has had any delay from this.

Just a quick question also, do builders have to provide you a timeline of schedule? As he said he does not need to tell me these things when frames are installed.

building-expert · Nov 19, 2023 7:56 pm

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 during builders site cut then builder has legitimate extension of time claim and a claim for delay costs.
However I would not believe that the builder has paid his suppliers upfront, without valid proof of payment.
If so then it is a matter for quantum validation.