The importance of a sound construction contract is often overlooked when the need to ‘win the project’ or ‘get on with the job at a minimal cost’ are factors at play. When a construction dispute (inevitably) arises, it can cost your company hundreds of thousands, if not millions of dollars to resolve issues which could have been prevented by an expertly drafted contract.
In this article, we consider five important clauses to turn your mind to when negotiating your next construction contract.
Coronavirus or 'COVID-19' continues to spread across the globe, with the World Health Organisation (WHO) referring to the epidemic as a “public health emergency”.
With Australia’s reliance on China for providing goods and materials for the construction sector higher than ever before, many of Enterprise Legal’s construction clients have started raising concerns about how the outbreak could affect their projects, big and small – and when it inevitably does, what will their rights and potential liabilities be?
Most Developers/Principals of construction projects care about three main things when it comes to their project delivery, that is - will the project be:
The recent shortage of materials from China as a result of factory closure and import limitations could see Developers and Principals alike exposed on all three of the above criteria.
Some key factors for Developers/Principals who have current projects or projects that are at the ‘sign-up’ phase to consider include:
Conversely, the risk to Contractors are in the reverse. For example:
Enterprise Legal’s advice is ‘be alert, but not alarmed’. Make sure that you arm yourself with the knowledge that you’re legally protected and the best way to do this is to see an expert construction lawyer to get guidance and advice on what the best way forward is for your specific project, so as to mitigate any liability or other exposure under the Contract or otherwise.
Most importantly, by arming yourself with the relevant information and taking practical steps without delay, you will maximise the chance of successfully delivering the project, which is a win-win for both Developer/Principal and Contractors alike.
If you are currently a party to a construction project or planning to sign an agreement in the near future, contact Enterprise Legal’s Construction Law Team for advice today! Ask to speak to our firm director and dedicated building and construction specialist, Sharné Lategan.
Always remember, prevention is better than cure – and being proactive is the best next step you can take!
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In early June the Federal Government announced a $680 million HomeBuilder scheme to stimulate the construction sector as Australia begins the economic recovery following COVID-19. This scheme will allow eligible owner-occupiers to access a tax-free grant of $25,000 to build a new home, or substantially renovate their existing home from now until 31 December 2020.
To check whether you are eligible, click here to view the HomeBuilder Frequently Asked Questions PDF.
If you are interested in taking advantage of the HomeBuilder grant, there are a few things you should consider before you jump in.
One of the requirements of the grant is that construction begins within three months of signing the contract. Due to this tight time frame, it is important that you are organised and prepared, so you should consider whether you will have the sufficient time to have plans drawn up, obtain council approval and commence building within three months when signing the contract. From our experience, three months is a ‘tight timeframe’ to achieve the latter, so preparation is key!
In addition to the HomeBuilder grant, you should consider whether you may be eligible for other grants, which may include the first home owner grant and the regional home building boost grant. You won’t be able to use the grant in your initial deposit as it is expected that it will take some time for it to be awarded. As such, you will need to ensure you have sufficient financing for any initial costs that you may have.
It is very important that your builder is registered or licensed, otherwise you will not be eligible for the grant. You also cannot do the building work yourself as an owner-builder, or engage family or close friends. When selecting a builder, you should also review their proposed prices to ensure they’re reasonable and that you aren’t being ‘ripped off’ by builders capitalising on the HomeBuilder grant. Be on the lookout for builders who only commenced operating following the HomeBuilder announcement, as they are more likely to be taking advantage of the scheme than longstanding builders. Lastly, always make sure that you perform a QBCC license search on your builder, as this search will show you:
It is very important that you do not simply ‘sign up’ to the contract your builder presents. The financial commitment you are making is likely one of the biggest in your life, and it should be treated with the same caution and respect as any other financial arrangement of that size. There are a number of key clauses that you need to pay very careful attention to, and a number of standard amendments you ought to request.
Make sure you check out our knowledge page in the coming weeks for our ‘Top 10 Domestic Construction Contract Clauses to Consider’ article.
In the meantime, if you would like to take advantage of the HomeBuilder grant and it feels like there is too much to consider, the team at Enterprise Legal can help.
☎️ (07) 4646 2621
✉️ Submit an Online Request