Building & Construction Law FAQs
Author(s):LAC Lawyers
Publish Date: April 30, 2008
Q. Can I claim against my builder’s home warranty policy?
A. Invariably clients are asking this question when the building works are incomplete and they are complaining about defects. Defects are no longer covered by building warranty insurance except in limited circumstances.
Q. I am an owner/builder – Do I require home warranty insurance?
A. As an owner/builder, insurance is required where you wish to sell the property within six years.
Q. My next door neighbour has backfilled behind a decorative wall on one side of my property which is within my boundary and despite repeated attempts to stop this my neighbour continues to disregard my wishes. Is there anything I can do?
A. You need to retain a solicitor to write to your neighbour to serve them with notice that this practice is to stop and that they are to remove the backfill from your premises otherwise you will obtain equitable relief and take action against them for trespass.
Q. I went to a large well known building company which is involved in the design and construction of luxury homes. Some years ago I obtained a DA but construction has still not gone ahead as I had some reservations on the design. I have had a number of conversations with them and nobody seems to want to do what I want. What should I do in the circumstances?
A. There are a number of choices available to you including the following:
- Find another builder.
- Negotiate with your current builder to find a satisfactory way of having your instructions carried out.
- Buy the plans from them and have another builder do the building work for you.
- If you have signed a building contract with them then seek specific performance.
- If there are misrepresentations involved then pursue your remedies at law.
- If there are any breaches of the Home Building Act, Trade Practices Act or any other Act then pursue your remedies there.
Q. I applied for a DA some time ago to build some home units and for a variety of reasons only limited work has commenced on site. I wish to maintain the DA and on sell the property which will be far more valuable if this can be done. What can I do?
A. Obviously if you allow the DA to lapse you will have to apply for a new one which you may find it difficult to obtain. Irrespective you will need to prove to the local council that substantial works have commenced on the site and provided you have enough time you should carry out substantial earthworks which may assist you in this regard.
Q. Should a home warranty certificate be sighted before the builder commences work on site?
A. Yes. Although building warranty insurance is of limited value as it now no longer covers defects it is extremely important where builders or building companies go to the wall which occurs with greater frequency in times of an economic downturn.
Q. What should I do where I am physically threatened by the builder and I am dissatisfied with the progress and quality of the works performed?
A. First you should report it to the police. Second - retain a lawyer and obtain independent legal advice. Third - if you are in arrears bring the arrears up to date. Fourth - refuse to pay where the builder is clearly in breach of contract. Five – check all variations to ensure that they are properly claimed and are within time.
Q. How effective is disputes resolution when dealing with Australian construction and infrastructure projects?
A. Parties in dispute are often dissatisfied with the disputes resolution procedures in contracts. Unfortunately disputes are widespread throughout Australia and are normally associated with cost overruns irrespective as to how or why they arise. Essentially the majority of parties are not satisfied with the time, cost, process and outcome of disputes resolution. A lot of this can be traced back to insufficient time being applied to disputes resolution clauses at the time of precontractual negotiations. As in all these cases very little time is spent on precontractual matters with some contractors preferring to issue documentation themselves without referring it for proper legal advice to avoid these issues. The fees charged in this area are not a cost but investment in the future and it gets back to the age old adage of being penny wise but pound foolish. Who can afford the increased costs of unsatisfactory disputes resolution or litigation when the real money should have been spent up front obtaining proper legal advice and assistance rather than throwing buckets of money at a process which will surely leave one party badly disadvantaged and potentially wearing substantial costs.
Q. Our next door neighbour has had some renovations carried which encroach on our boundary – can you help us?
A. Yes. Various things can be done including lodging a complaint with council and if encroachment is not removed you can try to have council issue a demolition order so the offending structure will be removed. Alternatively you may consider selling them a part of your land and coming to a suitable monetary settlement if possible.
Q. I am considering buying a house and I have been asked to sign a building contract but am somewhat sceptical about it and wonder whether you can help me?
A. Yes. In general terms there are three types of building contracts in circulation for domestic building projects in NSW. There is the OFT, the MBA and the HIA building contracts all of which have their pitfalls. Whenever a building contract is negotiated the homeowner should ensure that they fully understand what they are buying and what they paying for. In other words you should be aware of whether you are paying fixed price, cost plus, cost plus a fixed percentage, or whether it is on a do and charge basis etc. You also need to be aware of the traps and pitfalls associated with variations and at what stages payments are demanded and whether or not prepayments are required. Obviously builders are there to make a profit but many of them underquote the job to obtain the contract and once they have landed the homeowner the real fun starts which includes a raft of changes and ongoing flow of variations so that in some circumstances the actual contract price can increase anywhere from 25% to 100% during the construction period.
Q. I have entered into an HIA building contract for a modular home to be designed and constructed by the supplier. The house was to be built on an estate which has certain covenants governing the type of construction allowed there. The manufacturer, supplier and the builder are one and the same and they have indicated at all times they would be able to obtain all the necessary consents allowing my home to be built there. Despite this council has served me with a notice indicating that as I do not have the relevant consents I am not at liberty to proceed with construction. What can I do and can you help me?
A. Yes. What you need to do is to obtain competent legal advice. The lawyer will serve a notice of termination on the supplier, seek to have all monies expended on the project returned to you and provided the circumstances warrant it seek damages for negligence at common law and/or under the Trade Practices Act for misleading and deceptive conduct.
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