Browse Forums Building A New House 1 Jun 22, 2014 11:44 pm We have designed our home and had all the necessary plans done up. It is time to engage a builder. It occurs to me that signing a contract for $100,000s of work is no small thing. What do people usually do - engage a lawyer to peruse the contract before signing? Or even get a scope of works drawn up in advance? How do you get maximum protection from getting the short end of the stick? Cheers, Bill Re: Contracts with your builder - get a lawyer? 2Jun 23, 2014 6:55 am If you are unsure or don't understand something, the safest option is to get a lawyer. In SA the builders use standard industry contracts and it is relatively easy to understand your rights and obligations. BLOG: http://www.ourphoenix38.blogspot.com.au H1 THREAD: viewtopic.php?f=31&t=70454 Re: Contracts with your builder - get a lawyer? 3Jun 23, 2014 9:16 am If you don't want to go as far as a lawyer, it seems that some of those places who offer inspection services will also check the contract. If you're thinking of getting an independent inspector (and it seems a good idea where the builder is happy with it), you may find that the inspector you choose will also offer the service of checking your contract for problems. It always feels good not to get lawyers involved in something ... Re: Contracts with your builder - get a lawyer? 4Jun 23, 2014 10:14 am Forg It always feels good not to get lawyers involved in something ... Agreed, although my lawyer is a reasonable guy. It is a rural location so an inspector would be difficult. I suppose I will know more once I see the contract. Cheers, Bill Re: Contracts with your builder - get a lawyer? 5Jun 23, 2014 11:23 am I would recommend that you use a standard HIA contract as it is reasonably fair to both parties (unless it is edited by the builders). But the thing you will need advice on is getting the specification right, and actually understanding the terms of the contract so that the sections that have to be filled in are not to your disadvantage. For instance: Liquidated damages (see http://www.anewhouse.com.au/2012/01/und ... d-damages/) Progress payments (see http://www.anewhouse.com.au/2012/01/how ... yments-be/) The Harder You Try - the Luckier You Get ! Web site http://www.anewhouse.com.au Informative, Amusing, and Opinionated Blog - Over 600 posts on all aspects of building a new house. Re: Contracts with your builder - get a lawyer? 6Jun 23, 2014 11:38 am bashworth I would recommend that you use a standard HIA contract as it is reasonably fair to both parties (unless it is edited by the builders). But the thing you will need advice on is getting the specification right, and actually understanding the terms of the contract so that the sections that have to be filled in are not to your disadvantage. For instance: Liquidated damages (see http://www.anewhouse.com.au/2012/01/und ... d-damages/) Progress payments (see http://www.anewhouse.com.au/2012/01/how ... yments-be/) Good advice above on the contract. Master Builders contracts are also pretty fair for both parties too. With regards to LD's - be careful - it's a double edged sword. I will apply LD's on late payment for any customer insisting on LD's regarding delivery performance. It goes both ways. Also beware that a builder can legitimately claim an extension for delays beyond their control that could not be reasonably foreseen (such as significant inclement weather or materials being not available/delayed). Note that things reasonably foreseen (such as public holidays etc) are not grounds for an extension. Suspension of works due to the client not paying stage payments on time and delays caused there in will stand up as delays. That is, not only the days of delay in payment but extra time to reschedule works to commence (which could be weeks!). There are many ways that a builder can wiggle out of LD's if he is organized. I think the bottom line is to have a good relationship with your builder and talk to other customers regarding his performance. Re: Contracts with your builder - get a lawyer? 7Jun 23, 2014 3:04 pm Thanks for the replies so far. I will check out what contract he uses. Re: Contracts with your builder - get a lawyer? 8Jun 23, 2014 10:59 pm RedHotMike With regards to LD's - be careful - it's a double edged sword. I will apply LD's on late payment for any customer insisting on LD's regarding delivery performance. It goes both ways. Also beware that a builder can legitimately claim an extension for delays beyond their control that could not be reasonably foreseen (such as significant inclement weather or materials being not available/delayed). Note that things reasonably foreseen (such as public holidays etc) are not grounds for an extension. Suspension of works due to the client not paying stage payments on time and delays caused there in will stand up as delays. That is, not only the days of delay in payment but extra time to reschedule works to commence (which could be weeks!). There are many ways that a builder can wiggle out of LD's if he is organized. Liquidated damages are not a "two edged sword" nor can they "go both ways". Yes a builder is within his rights to contractually apply late payment penalties in a contract but it is not a situation of "well if you insist on liquidated damages then I'm going to do this to you". That's ridiculous. A builder needs to schedule his program of works and allow a suitable contract period that is inclusive of all foreseeable delay days. That's his job and if he can't work out how to determine how long his build will take then he shouldn't be in business. Liquidated damages shouldn't bother him because he's able to build within the timeframe he's agreed upon in the contract, right? If he screws this up the client needs financial protection for an expensive project that has run over the time agreed to legally by both parties. Otherwise what's to stop a builder agreeing to a 12 month build and completing it in 24 months - 12 months of financial hardship for a client who has not budgeted for the extra year of rent/two mortgages etc? Liquidated damages are there to provide a measure of protection for the client. Too many builders try to browbeat clients into a ridiculously low figure or veiled threats like the above which is unnecessary. If you don't think you can build it in the agreed period then don't sign a contract saying you will. And whilst the builder can extend the contract period through various unforeseen events, it is important to remember that the client is within his rights to challenge any request for an extension. Completed a knock down and rebuild in northern Melbourne. Handover completed 27/09/2013 and now moved in. Mofflepop, Are you building around Qld Manly? Building & Legal is a partnership between a construction guy and a construction Lawyer. Construction: we have… 9 25554 MBA and HIA both have sub contract agreements, check them out 2 7315 Industry type domestic contracts are prepared by industry bodies for the benefit of the builders. This means that if you are the owner watch out. One of the points is… 0 3226 |