Building a home is a significant and exciting venture, but it’s important to be well-prepared for any challenges that may arise. While it’s natural to focus on the positive aspects, taking proactive steps to understand and protect your rights can help ensure a smooth process. This checklist is designed to guide you through essential preparations, helping you stay informed and ready for whatever comes your way.
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Review the Contract
- Request a fully itemised quote.
- Check and ensure you understand the Contract: Ensure the builder is following the Home Building Act 1989 (NSW) (‘the Act’) and that the contract complies with NSW regulations.
- The contract must be in writing and dated when signed;
- It must contain a sufficient description of the work to be carried out;
- Must contain a progress payment schedule or a claims based regime as work is performed and costs are incurred (plus margin) supported by invoices and other documentation;
- The builder’s name and contract number must be clearly set out;
- Plans and specifications must be attached and be stated to form part of the contract;
- There must be a notation which entitles you to a copy of the insurance certificate under the Home Building Compensation Scheme;
- Set out the warranties under section 18B of the Home Building Act which are implied into the contract;
- Have a clause setting out the circumstances under which the contract can be terminated;
- Check that the deposit does not exceed 10%.
- Scope of Work: Ensure that you fully understand the scope of the work to be undertaken, what is included in the contract price and what may be the subject of a variations or Prime Cost items (fittings, appliances, tiles) which may increase the price. Check that the price allowed is reasonable and you have thought of everything.
- Payment Schedule: Confirm that progress payments align with the work actually done and the dollar value placed on each stage is realistic completed as per the contract and Section 8 of the Act.
- Make sure that all variations are required to ne made in writing and approved by you.
- Timelines: Compare the project timeline with the contract schedule. Are there delays beyond what is reasonable?
- Liquidated damages: ensure the contract provides for liquidated damages where there are delays beyond the agree timeline and that the damages agreed will cover your real losses – including renting if applicable.
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Communication with the Builder
- Document Conversations: Keep written records of all communications, including emails, texts, and letters.
- Attempt to Resolve Issues: Attempt to resolve any disputes directly with the builder, referencing the contract.
- Formal Complaint: Send a formal written complaint to the builder, referencing the relevant sections of the contract and the Act.
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Quality of Work
- Inspection: Arrange an independent inspection to assess the quality of work at agreed points and use a specialist building consultant.
- Defects & Warranties: Identify defects or poor workmanship. Remember that under the Act, major defects are covered for six years, and minor defects for two years.
- Standards & Safety: Ensure the work meets the Building Code of Australia (BCA) and relevant Australian Standards.
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Project Delays
- Document Delays: Record any delays, the reasons provided by the builder, and the impact on the project.
- Builder’s Response: Assess how the builder responds to delays and whether they propose reasonable solutions.
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Insurance and Licensing
- Builder’s License: Verify that the builder holds a valid NSW Fair Trading builder’s license (Free online check: https://verify.licence.nsw.gov.au/home/Trades).
- Home Warranty Insurance: Confirm that the builder has provided the required Home Warranty Insurance for projects over $20,000.
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Document Everything
- Maintain Records: Keep all contracts, receipts, correspondence, photos of the work, and inspection reports organised. These will be crucial if legal action is necessary.
If you have kept good records along the way, you will be in a better position in the event that there is a dispute that can’t be resolved by talking to your builder.
Step 1: Contact NSW Fair Trading: Before escalating to legal action, you may contact NSW Fair Trading for mediation or advice.
Step 2: Consult a Lawyer: Seek legal advice if issues persist, especially if considering termination of the contract or if the builder is threatening legal action.
When should you seek legal advice?
- If the builder refuses to rectify defects or complete the project.
- If there are significant delays without reasonable cause.
- If the builder breaches contract terms or demands payment for unapproved variations.
- If the builder is unlicensed or uninsured.
- If you have made a formal complaint and the builder does not respond adequately.
Tribunal or Court Action:
- If unresolved by NSW Fair Trading and all attempts to mediate have failed, you may consider filing a claim with the NSW Civil and Administrative Tribunal (NCAT) for disputes up to $500,000.
- NCAT can make orders such as:
- Payment for home building works or services
- Incomplete or defective home building works
- Supply of specialised work such as plumbing and electrical
- Damage caused to other structures by home-building works
- Insurance Claim appeals
- It is important to note that in relation to claims involving the allegation of defective residential building work or specialist work, NCAT’s preferred outcome is rectification of the defective work. It is not common for damages to be awarded in these circumstances.
- For larger claims or complex cases, you may need to consider court action.
Here’s how The Law Office of Conrad Curry can help:
- We can advise you of your legal rights and obligations when a dispute arises
- Assistance in getting the contract back on track
- Ensure that you follow the proper process to end the contract if you cannot resolve the dispute with the builder
- Ensure that you follow the appropriate dispute resolution processes if the contract is ended
- Act for you in the NSW Civil and Administrative Tribunal (NCAT)
DISCLAIMER
This article reflects the current law at the time of publication. It is intended for informational purposes only and does not constitute legal advice. The actual decisions in each case are summarised for general understanding. For specific legal guidance in relation to your situation, please consult with a qualified legal professional.
