Building Contracts Explained:
All building contracts are legally binding documents and therefore must at a minimum, be dated and in writing. They must clearly identify all parties to the contract, the location and description of the land upon which the building work is to be carried out, often referred to as the site, contain a clear description of the work to be carried out, the time within which the work is to be carried out and the amount of money or consideration often referred to as the contract sum. Such contracts are to also be signed and witnessed by all parties to the contract. There must be no ambiguity.
Most building contracts come in a pre-drawn format which only requires details to be inserted and are available from various sources such as the Housing Industry Association (H.I.A), The Master Builders Association (M.B.A.) or the Australian Institute of Architects (A.I.R.A ) a Joint Contracts Committee (J.C.C.) or sometimes downloaded from the internet. Contracts from various associations are usually up to date and comply with regulatory conditions that are applicable within the state or territory within which the building work is to be carried out. Contracts that are downloaded from the internet are sometimes drafted overseas and don’t cover state or territory regulations or may not be up to date. Like so many other things these days most building contracts are customizable with some offering various forms of contracts that suit various types of building work such as Small Building Works contract for additions or an architect’s contract if you are having the architect administer the contract on your behalf. So it’s important to match the right building contract with the job. Your design professional can advise you on which contract is best suited to your particular project.
Building contracts will, in most cases contain various clauses that have been developed over the years and it’s important to understand what each of these clauses mean and how to interpret them. It’s the interpretation of the contract that’s often the cause of disputes. That is why we recommend that you seek the services of a design professional or specialist contract administrator to assist you in the administration of your building contract. We will now examine several of the major clauses in general terms only. Each contract is specific to the parties and the particular project they have been drawn up for. Please use the following information as general advice only and seek professional advice if you decide to dispute the contract.
Taking Possession:
Once contracts have been entered into the first thing a builder must do within the timeframe set out in the contract is to “Take possession of the site”. During the term of the contract the builder holds the ultimate responsibility for delivering the project within the terms of the contract, the functioning of the site and all site safety. To do this the builder takes possession of the site and erects barricades or fences around the site to control the site, to control who comes and goes and delivery or removal of materials etc. In Queensland a builder must also prepare site safety procedures and erect site safety signage and keep records including a set of approved plans and specifications along with the conditions of approval. Contracts will permit the client to enter the site for the purposes of inspecting the works and to hold site meetings with the builder however the builder ultimately takes the responsibility and has the ultimate say of who can attend or not attend the site.
