Builder Terminated contract after Variation Requested

JoannePalermo · Jul 10, 2024 4:33 pm

Hi Home One members,

I am in a bit of a complicated situation and any guidance would be very much appreciated.

The builder has terminated the contract after sending "Variation Requests" and pressuring myself, the owner, to sign. The builder claimed that the RBS (surveyor), had written confirmation that their variations are ok, but stated that the owner needs to approve as well. This does not make sense because the builder is requesting for the owner to sign in order to change to plan to accommodate them. The owner has never requested for these variations. The contract that I signed was a Master Builders Victoria contract.

However, the owner had provided the RBS with plenty of evidence to suggest that his determinations may not be all correct and have also received confirmation from the VBA technical advise team that the variations should not be done reactively "after the building has completed".

The builder has since left, the RBS issued written direction to fix has not been fulfilled, a VBA assessment report is still outstanding, and no occupancy permit can be granted.

What is the owner's rights when this type of situation occurred?
Can the builder just simply abandon the project freely like this without any consequences ?

It is heartbreaking what the builder has decided to do and I would really be grateful to anyone that could please provide some insight. I am feeling very desperate, hopeless, and my health is near breaking point.

Many thanks in advance, Joanne P

Ashington Homes · Jul 10, 2024 4:44 pm

[quote="JoannePalermo"]Hi Home One members,

I am in a bit of a complicated situation and any guidance would be very much appreciated.

The builder has terminated the contract after sending "Variation Requests" and pressuring myself, the owner, to sign. The builder claimed that the RBS (surveyor), had written confirmation that their variations are ok, but stated that the owner needs to approve as well. This does not make sense because the builder is requesting for the owner to sign in order to change to plan to accommodate them. The owner has never requested for these variations.

However, the owner had provided the RBS with plenty of evidence to suggest that his determinations may not be all correct and have also received confirmation from the VBA technical advise team that the variations should not be done reactively "after the building has completed".

The builder has since left, the RBS issued written direction to fix has not been fulfilled, a VBA assessment report is still outstanding, and no occupancy permit can be granted.

What is the owner's rights when this type of situation occurred?
Can the builder just simply abandon the project freely like this without any consequences ?

It is heartbreaking what the builder has decided to do and I would really be grateful to anyone that could please provide some insight. I am feeling very desperate, hopeless, and my health is near breaking point.

Many thanks in advance, Joanne P

/quote]
Joanne

Sorry to hear the situation you are in.

Firstly you really need legal advice from a construction lawyer, but in the interim, you really need to refer to your construction contract.

All contracts have a list of reasons as to when an owner can terminate and when a builder can terminate a contract. Normally the reasons for the builder to terminate are quite limited.

If you are using an HIA contract I would suggest you get some advice ASAP as there are underlying construction and contract law precedents which dictate what can and can't be done as well. I mention the HIA contract as sometimes builders amend these so heavily that they defy basic principles of contract law. But a lawyer can guide you through this and give you some peace of mind.

Cheers

Simeon

building-expert · Jul 11, 2024 3:11 pm

Read your building contract.
Contract termination is a two step process where firstly a notice of intention to terminate is sent, specifying default and giving time for the default to be rectified. If then the default persists it is followed by a notice of termination.
Your details are scarce but on the face of it it is likely that there is wrongful termination.
RBS has no function in regard to contract variation, RBS can only act on a request to amend a building permit. A request must have your approval. However, in limited circumstances the builder may have a right to claim a variation if the variation is of a type which is beyond builder's control.
You should invest in expert advice to guide you going forward

JoannePalermo · Jul 11, 2024 11:28 pm

Thank you for the replies. It was a bit tricky because the RBS issued the builder with DTF . The non compliances were difficult to fix like the damp proof course that were not visible on the wall and missing on some walls. The builder seek alternate route by having a performance solution and certification from an engineer to accompany the variation to determine that it was compliant and no need of putting it in.
The builder also has not built the house to the height in the plan ,the crawl space is lower by 10 cm. He proposed the variations to have the plan amended to match the building.
I was not happy and didn’t want to sign for these but the RBS had agreed with the builder.
I think it’s not right. The builder was not happy then his lawyer said I am in breach of contract when I do not sign the variations for the builder and the RBS had already approved these variations.
Lawyer sent no of suspension and 14 days later notice of intention to terminate
I told him I have not breached any terms in the master builder contract

Now it’s terminated and I am confused of what to do next
Can I get the same builder to come back and correct the non compliance?
In this scenario, who is in control of the unfinished building?
Does it need to be protected?

I think the termination is not right.

stefcep · Jul 16, 2024 3:49 pm

I think what may have happened is the builder has sought the RBS approval, the RBS has permiitted the amendments
ON THE PROVISO THE OWNER AGREES. The owner has not, the builder has walked.

Can you live with the builders proposals?

If not, you may have a long drawn out costly and stressful future and in the end you may not get what you want any way, given that the builder does have an engineered solution and has offered to correct.

JoannePalermo · Jul 16, 2024 10:54 pm

Ashington Homes

JoannePalermo

Hi Home One members,

I am in a bit of a complicated situation and any guidance would be very much appreciated.

The builder has terminated the contract after sending "Variation Requests" and pressuring myself, the owner, to sign. The builder claimed that the RBS (surveyor), had written confirmation that their variations are ok, but stated that the owner needs to approve as well. This does not make sense because the builder is requesting for the owner to sign in order to change to plan to accommodate them. The owner has never requested for these variations.

However, the owner had provided the RBS with plenty of evidence to suggest that his determinations may not be all correct and have also received confirmation from the VBA technical advise team that the variations should not be done reactively "after the building has completed".

The builder has since left, the RBS issued written direction to fix has not been fulfilled, a VBA assessment report is still outstanding, and no occupancy permit can be granted.

What is the owner's rights when this type of situation occurred?
Can the builder just simply abandon the project freely like this without any consequences ?

It is heartbreaking what the builder has decided to do and I would really be grateful to anyone that could please provide some insight. I am feeling very desperate, hopeless, and my health is near breaking point.

Many thanks in advance, Joanne P :([

/quote]
Joanne

Sorry to hear the situation you are in.

Firstly you really need legal advice from a construction lawyer, but in the interim, you really need to refer to your construction contract.

All contracts have a list of reasons as to when an owner can terminate and when a builder can terminate a contract. Normally the reasons for the builder to terminate are quite limited.

If you are using an HIA contract I would suggest you get some advice ASAP as there are underlying construction and contract law precedents which dictate what can and can't be done as well. I mention the HIA contract as sometimes builders amend these so heavily that they defy basic principles of contract law. But a lawyer can guide you through this and give you some peace of mind.

Cheers

Simeon

Thanks Simeon, the contract does not seem to support what the builder quoted in the termination notice. There was no order or notice from the surveyor to warrant the builder's variation proposed. The contract I signed is Master Builder HC7. and they quoted I breached clause 13 I have not talked to any lawyer.
Can a letter from my lawyer make him comeback to fix the bad job since he has left?
.

building-expert · Jul 16, 2024 11:37 pm

If your builder has terminated building contract (rightfully or wrongfully) your contract is at an end. There is no provision for the builder to come back. Financially the builder has no incentive to come back because nearly all of your contract money is already with the builder.
In fact to complete the contract and to rectify defects will cost builder more, perhaps a lot more than the remaining money under the contract. That is your reality.

Pedro4137 · Jul 17, 2024 11:05 am

Could you post clause 13

ponzutwo · Jul 17, 2024 12:42 pm

this sounds like you overestimated you ability to understand your contractual terms and obligations. Why you didn't get legal advice the moment their lawyer was involved is beyond me. This is a classic example of "fk around and find out". Seems you found out the hard way.

Go speak to a lawyer specialising in construction. not doing so in the fist instance is why you are now here in a forum seeking technical egal advice almost no one here can give you and those that can would charge for it.

JoannePalermo · Jul 17, 2024 1:48 pm

Pedro4137

Could you post clause 13

Thank you Pedro4137.
I do not think that any of these have been breached by me at all.
There were no notice and no order issued, there was a written direction to fix in effect.

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Pedro4137 · Jul 17, 2024 4:28 pm

Ok, how about section on terminating contract

JoannePalermo · Jul 17, 2024 5:36 pm

Pedro4137

Ok, how about section on terminating contract

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ponzutwo · Jul 18, 2024 11:39 am

I kind of feel like youre both in technical breach of a several of the clauses, but you being stubborn and not seeing a lawyer when the the matter when got serious and involved the builders lawyer is where your opportunity to remedy the situation evaporated. Anything moving forward now will be legal in nature and is going to cost you a whole lot of money

Ashington Homes · Jul 18, 2024 2:11 pm

Joanne

I can't stress how important it is for you to see a lawyer, like yesterday as ponzutwo has said.

It would have been ideal for you to get advice earlier but it may still not be too late.

If you are in either Sydney or Melbourne I can PM you the name of someone who can help you.

But you really need to act on this ASAP as there are a lot of nuances in construction law and procedures that need to be followed to firstly terminate a contract and then to get remedy afterwards. And there is a chance that the other party may have not followed these.

But please, get some professional help

Cheers

Simeon