Browse Forums Building A New House Re: HIA Contract COVID Clause 10Mar 03, 2022 7:27 pm Architectural Homes & Duplexes - specialising in custom designing homes to your budget Get a Free Onsite Consultation Today or send a PM for information, questions or advice. Re: HIA Contract COVID Clause 12Mar 04, 2022 8:39 am That is a poorly drafted clause. NOT LEGAL ADVICE, but: - The introductory wording talks about delays, but the later wording talks about both delays and cost increases. It is not clear to me if cost increases are actually covered by the clause. - This is essentially an "agreement to agree". If you don't agree, it is just outsourced to the dispute process - Not sure why you need a notice after practical completion There are other issues with the drafting too. Re: HIA Contract COVID Clause 13Mar 04, 2022 9:51 am SJT76 That is a poorly drafted clause. NOT LEGAL ADVICE, but: - The introductory wording talks about delays, but the later wording talks about both delays and cost increases. It is not clear to me if cost increases are actually covered by the clause. - This is essentially an "agreement to agree". If you don't agree, it is just outsourced to the dispute process - Not sure why you need a notice after practical completion There are other issues with the drafting too. not overly relevant though. The intent is clear. You can argue a poorly worded clause in a court, but if the intent is clear, then how its worded is usually a poor defense to a claim. Dark matter scientist, can breathe underwater, mind reader and can freeze matter just by willing it. Trust me, its in my sig. Re: HIA Contract COVID Clause 14Mar 04, 2022 9:57 am This is consistent with other clauses in the HIA contract which are patently unfair! It openly displays contempt of HIA member builders towards their customers and cannot bode well for them when the building cycle turns down.
I think the wriiten notice of delays and additional cost should be provided formally in writing at the time its known by the builder or within a very limited time period after the event. With suitable agreed proof documents including true cost increases without margins added and net of supplier rebates & incentives etc. Like HIA procedure for claiming weather delay days, its not appropriate to retrospectively advise COVID related or any other delays and cost variations only at PCI time. The loose way this HIA clause is drafted provides a blank cheque to the builder to find extra claims and allows avoidance of liquidated damages offsets on the final payment. I wonder how the home mortgage providers will percieve this risk transfer / profit grab. Maybe its good for them too? Also builders are very comfortable outsourcing disputes to tribunals, saves them time and labour costs, as well as frustrating customers and adding expert witness and legal expenses. Many just give in. They will actually encourage this! Better to have clear procedures etc. for claims and to resolve disputes together without engaging third parties. Re: HIA Contract COVID Clause 15Mar 04, 2022 12:13 pm Noname SJT76 That is a poorly drafted clause. NOT LEGAL ADVICE, but: - The introductory wording talks about delays, but the later wording talks about both delays and cost increases. It is not clear to me if cost increases are actually covered by the clause. - This is essentially an "agreement to agree". If you don't agree, it is just outsourced to the dispute process - Not sure why you need a notice after practical completion There are other issues with the drafting too. not overly relevant though. The intent is clear. You can argue a poorly worded clause in a court, but if the intent is clear, then how its worded is usually a poor defense to a claim. I have re-read and cannot determine the intent. I believe the intent is to make delays caused by COVID acceptable "the date for practical completion may be extended due to the effects of COVID". However, if that was the intent, there should be a mechanical process to document the delay and get an automatic extension. There is not. Instead, "the parties may reach an agreement". If they don't reach an agreement, then the matter is settled by VCAT or DBDRV. I cannot see that the clause grants right to the builder to an extension of time. There may also be an intent to cover cost increases, but this is less clear. However, "there may be delay costs to either the Owner and or the Contractor". So, if practical completion is delayed due to COVID, as an owner I now have additional costs for my rent and finances - so, should I submit a notice and require the builder to pay liquidated damages to cover these? I am not sure that this clause would be enforceable in any meaningful way. Re: HIA Contract COVID Clause 16Mar 04, 2022 2:28 pm SJT76 Noname SJT76 That is a poorly drafted clause. NOT LEGAL ADVICE, but: - The introductory wording talks about delays, but the later wording talks about both delays and cost increases. It is not clear to me if cost increases are actually covered by the clause. - This is essentially an "agreement to agree". If you don't agree, it is just outsourced to the dispute process - Not sure why you need a notice after practical completion There are other issues with the drafting too. not overly relevant though. The intent is clear. You can argue a poorly worded clause in a court, but if the intent is clear, then how its worded is usually a poor defense to a claim. I have re-read and cannot determine the intent. I believe the intent is to make delays caused by COVID acceptable "the date for practical completion may be extended due to the effects of COVID". However, if that was the intent, there should be a mechanical process to document the delay and get an automatic extension. There is not. Instead, "the parties may reach an agreement". If they don't reach an agreement, then the matter is settled by VCAT or DBDRV. I cannot see that the clause grants right to the builder to an extension of time. There may also be an intent to cover cost increases, but this is less clear. However, "there may be delay costs to either the Owner and or the Contractor". So, if practical completion is delayed due to COVID, as an owner I now have additional costs for my rent and finances - so, should I submit a notice and require the builder to pay liquidated damages to cover these? I am not sure that this clause would be enforceable in any meaningful way. the reasonable person test applies. the intent is clear. You cant really look at that as a reasonable person and say "duh, i don't get it". it boils down to that you're up for extra costs for any material price increases caused by covid and cant claim damages for delays that are caused by covid. you can argue with the builder if you like, but your not going to get anywhere i guarantee. Dark matter scientist, can breathe underwater, mind reader and can freeze matter just by willing it. Trust me, its in my sig. Re: HIA Contract COVID Clause 17Mar 04, 2022 2:37 pm Its all about shifting the financial risks to you rather than raising their prices to insure against it which affects sales. Would be based on forecasts of HIAs ecomomists and will include all Non-COVID specific increases as well. Just accept and budget for an extra 20% or so. Re: HIA Contract COVID Clause 19Mar 05, 2022 11:07 am Danyg Thanks for all the help and advice. I have paid $4000 to have my plans and contract drawn up and I am concerned that all builders will have this in their contracts now. Is it worth losing the $4000? Only you can determine that really. We walked away from our first builder after paying the initial deposit because it was a bad gut feeling. Losing the few thousand dollars wasn't ideal, but we could afford to, and it just wasn't worth the stress of continuing with them. I agree with previous comments that the wording of the clause is ambiguous. Our contract doesn't have anything like this in it. There's the usual about the builder being able to have an extension of time due to unforeseen circumstances, but nothing about covid specifically. We had a locked in fixed price though, so that could be a contributor. Re: HIA Contract COVID Clause 20Mar 05, 2022 11:54 am mcbks Our contract doesn't have anything like this in it. There's the usual about the builder being able to have an extension of time due to unforeseen circumstances, but nothing about covid specifically. We had a locked in fixed price though, so that could be a contributor. Look closer. It may not say covid, but there are clauses there that incude up to a 5% increase in contract value for unforseen increases in materials costs too. This can apply to fixed price contract regardless of fixed price. Dark matter scientist, can breathe underwater, mind reader and can freeze matter just by willing it. Trust me, its in my sig. 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 29600 You talk about deletions, are they variations or PS and PC adjustments? pleas list them 1 17442 Sorry but you have a crap builder. Probably too late now. For our last build I only spoke to builders who would allow me easy access (at no cost). I used my own sparky… 10 10664 |