Liquidated Damages

Jai8284 · Jul 02, 2024 9:11 am

Hi, I am building with one of the small builders here in south australia. He has supplied a HIA contract (not a member of HIA). as per the contract the completion date was 31st Dec 2023. I haven't received any written email from him for the extension / delay of the projects. am i eligible for liquidated damages?

ponzutwo · Jul 02, 2024 11:39 am

this was answered in another thread with the exact same name for you already

Mox80 · Jul 03, 2024 2:48 pm

Jai8284

Hi, I am building with one of the small builders here in south australia. He has supplied a HIA contract (not a member of HIA). as per the contract the completion date was 31st Dec 2023. I haven't received any written email from him for the extension / delay of the projects. am i eligible for liquidated damages?

- For liquidated damages to apply under the HIA contract, there would need to be a specified Completion Date in the contract that has passed without the Works reaching Completion.
You mention the specified Completion Date in the contract is 31st December 2023.

The Builder would need to formally request and be granted an extension of time to the Completion Date in order to avoid liquidated damages applying once the date passes.

If no written request for an extension has been received, you could put the Builder on notice in writing that they need to formally apply for an extension of time, providing reasons, to avoid liquidated damages.

Note that some Builders are under the impression that they don't need to provide a notice of delay. You need to exclude any public holidays and wet weather.

ponzutwo · Jul 03, 2024 2:59 pm

Mox80

You need to exclude any public holidays and wet weather.

you don't need to exclude days of wet weather. You exclude the block of days they've included in the contracts for inclement weather (its usually ~20), and anything over that has to follow the extension approval process, in writing, and agreed to by both parties. Often public holidays are already factored in the Build time completion too.

Its not up to the home owner to work out what days it rained on and whether it impacted the trades that were due on the day that didn't show up or had to be rebooked 9 weeks later. In relation to LD, teh contract is pretty easy to understand. The issue arrises when the builders try to bamboozle clients around when "completion" occured.

Contracts define completion as "built to plans and specifications" If they have to come back and do works that prevent you from moving in, then arguably the home is not complete to plans and specifications REGARDLESS of what they might try to tell you. And they will try to tell you.

Some builders are getting people in for PCI 8 weeks out from hand over and using PCI date as "completion" or trying to tell people the OC is the date teh home is complete. You can do PCI and call it practical completion or get an OC, but if you need another 8 weeks to make the house habitable or able for me to move in, its not complete to plans and specifications.

Mox80 · Jul 03, 2024 4:55 pm

ponzutwo

Mox80

You need to exclude any public holidays and wet weather.

you don't need to exclude days of wet weather. You exclude the block of days they've included in the contracts for inclement weather (its usually ~20), and anything over that has to follow the extension approval process, in writing, and agreed to by both parties. Often public holidays are already factored in the Build time completion too.

Its not up to the home owner to work out what days it rained on and whether it impacted the trades that were due on the day that didn't show up or had to be rebooked 9 weeks later. In relation to LD, teh contract is pretty easy to understand. The issue arrises when the builders try to bamboozle clients around when "completion" occured.

Contracts define completion as "built to plans and specifications" If they have to come back and do works that prevent you from moving in, then arguably the home is not complete to plans and specifications REGARDLESS of what they might try to tell you. And they will try to tell you.

Some builders are getting people in for PCI 8 weeks out from hand over and using PCI date as "completion" or trying to tell people the OC is the date teh home is complete. You can do PCI and call it practical completion or get an OC, but if you need another 8 weeks to make the house habitable or able for me to move in, its not complete to plans and specifications.

Let me restate key points properly

Without seeing the specific contract, we cannot make assumptions about wet weather provisions. These must be assessed on a case-by-case basis.
Individual weather days need to be evaluated based on actual impacts, not blanket exclusions of periods. Light rain may not delay work, for example.
The onus is indeed on the homeowner to assess delay days and submit a formal request for damages claim since the Builder has not officially submitted delays and is in breach of the contract T&C’s.
If the builder has not lodged a formal delay notice as required, then they are in breach
Any outstanding works affecting usability or handover should factor into the completion determination for liquidated damages assessment.