Construction contract law

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. 

Smoke alarm

While most of us enjoy the festive spirit that Christmas lights bring during the holiday season, they unfortunately do lead to a higher incidence of house fires.

In an effort to continue to reduce the frequency of property damage and loss of life, the law was amended at the beginning of 2017 to impose significant new smoke alarm obligations on the owners of all residential dwellings in Queensland. Unfortunately, given the lengthy ‘phase in period’ for the laws, many homeowners are unaware that their obligations have changed. This is particularly concerning from an insurance perspective, as there is a risk that failure to comply with these requirements could void your insurance, resulting in no payout in the unfortunate event of a fire. Even worse, the improvements required by the laws are considered necessary to better protect human life and a failure to comply could have devastating results. So, what do you need to know? 

I’m an owner-occupier

Any existing smoke alarms manufactured more than 10 years ago must be replaced with ‘photoelectric alarms’ (which operate by ‘seeing’ the smoke, rather than ‘smelling’ it) that comply with the Australian Standard. All alarms must be interconnected with every other smoke alarm in the dwelling, so that all alarms activate together. They cannot contain an ionisation sensor. The alarms must be hardwired or powered by a non-removable 10-year battery.

There are also new requirements for the placement of smoke alarms throughout the dwelling.

All smoke alarms in your home must be upgraded to meet the requirements by 1 January 2027. 

I’m looking to renovate

If your project requires a development approval, you will need to comply with the new smoke alarm requirements as part of the approval process. Keep this in mind when determining your project budget.

 I’m looking to sell

From 1 January 2022, a home will need to have smoke alarms which satisfy the new requirements prior to the property being able to be sold. Obviously if you are planning on selling in the next few years, you should budget (both from a financial and a time perspective) for the installation of new alarms, to ensure it does not prevent your potential sale. 

I’m a landlord

Smoke alarms manufactured more than 10 years ago must be replaced and all alarms must be upgraded by 1 January 2022. However, we recommend that landlords make it a priority to upgrade existing smoke alarms as soon as possible, to minimise any risk of liability to your tenants for property damage or even worse, injury or death.

For more information, check out the Information Sheet published by the Queensland Fire and Emergency Services or contact the Enterprise Legal Property and Construction Law experts today.

Office party

‘Tis the Season to be jolly, not careless –

With less than a month to go until Christmas, most businesses will find themselves busy organising the annual office Christmas party. If you haven’t started your organising yet, you should probably stop reading this article and start phoning some local venues and suppliers to avoid you and your staff missing out! Make sure that you return to read this article once you have a Christmas party planned, as it could come in handy!

Christmas is a great time of the year to celebrate the accomplishments of the past year with your staff, to thank them for the important part they play in your business and to relax over a cold beer or wine (perhaps even a couple of both)! Whilst there is nothing wrong with a drink or two (or three), there are key steps you need to take to reduce the risk of your business being exposed to a post-Christmas party legal claim involving (for example) sexual harassment, bullying or a workplace injury.

Here are Enterprise Legal’s top five tips to ensure the only post-Christmas party issue your business faces is a blown out bar tab and a couple of “sickies”.

Tip One: Pre-Party Precautions

Send an email to your staff a week before the event reminding them it is a work function and that the normal policies, procedures and workplace expectations will apply.

Follow the email up with a pre-party staff meeting the day of the event.

Tip Two: Policies and Procedures

Make sure all of your workplace policies are up to date, and at least appropriate cover off on the following potential risks:

  • Harassment, sexual harassment, bullying and discrimination
  • Drugs and alcohol
  • Expected behaviour at workplace events
  • Social media

Tip Three: Appoint a Supervisor

Appoint a trusted staff member to supervise the event, behaviours at the event and manage the responsible service of alcohol (or liaise with the venue regarding same) and empower them to take appropriate steps in circumstances where they identify a workplace health and safety hazard or risk.

Tip Four: Transport To and From

Make it clear to your employees that transport will be arranged by your business and that you encourage them to use it at the time(s) stipulated, or tell your employees what options are available to them to ensure they arrive home safely.

Tip Five: Post-Party Complaints

Make sure that any post party complaints are dealt with promptly and appropriately. This is the biggest indicator that a potential claim is looming and experience shows that handling the complaint properly (including seeking legal advice where appropriate) can significantly reduce the likelihood of a claim.

Ostwald Brothers Administration

It has been nearly three weeks since the Ostwald Brothers Group entered into voluntary administration, affecting hundreds of local construction companies, employees and their families.

This is an unfortunate but timely reminder to contractors and suppliers that if a head contractor is going belly up, you need to take swift and serious action to avoid missing out on being paid for the work that you have already done and prevent the loss of your current contract and subsequent projected income stream.

What you need to know

Once a company is in external administration, one of two things typically occurs:

most likely, the head contractor’s component of the project is terminated, the principal appoints either a new head contractor (who can select new subcontractors or suppliers) or it apportions the remainder of the work to current or new subcontractors and suppliers; or
less likely, the administrator endeavours to complete the project under the head contractor’s existing contracts with the principal, subcontractors or suppliers, at least for a short period of time. However, even if the principal doesn’t terminate the contract initially and the administrator takes this option to begin with, it could change at any time, as per scenario one.
Either way, existing subcontractors and suppliers face the significant possibility that they will no longer be engaged on the project, meaning they risk losing their projected income stream.

What you need to do

You should seek legal advice as soon as possible if you have any outstanding payment claims, whether or not you have already submitted the payment claims to the Ostwald Brothers Group, as you could be eligible to ‘jump the queue’ and claim payment from the principal directly in both circumstances, under the process commonly referred to as a ‘subcontractors’ charges claim’.

If you are eligible to jump the queue and if you serve certain required notices in a manner that is fully compliant with the relevant laws, the principal must (in most circumstances) retain the amount owed to you by the contractor and either pay it to you directly or pay it into Court, pending an outcome. This process has strict timeframes and compliance requirements – any delay or a minor mistake could render your entitlement void.

Further, if you believe that you are at risk of losing your contract, you should start negotiating with the appropriate parties to ensure you remain a preferred subcontractor and secure your portion of the work required to facilitate the completion of the project.

How we can assist you

It is absolutely essential that you obtain legal advice to ascertain what rights you have. Any delay in seeking legal advice could mean that you forego rights which you would otherwise be entitled to.

Sharné Lategan, Principal Legal Director of Enterprise Legal has assisted many businesses in similar circumstances to obtain the outstanding amounts due and owing to them and solidify their income stream from the project, at minimum cost to their own business.

Contact us today to book a one hour one-on-one consultation with Sharné Lategan for the fixed-fee price of $330.00 including GST. During the consultation, Sharné will get to understand your business and its position and rights in relation to the Ostwald Brothers’ voluntary administration and provide a preliminary assessment on whether your business qualifies for a subcontractors’ charges claim, as well as informal advice on what steps your company should take next to best protect its interests.

For more information please phone (07) 4646 2621 during business hours.