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WA Building Contract Being Ignored - How to Keep Them Honest?

Discussion in 'Property Law Forum' started by Kye Jessop-Jolly, 20 November 2014.

  1. Kye Jessop-Jolly

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    I am wondering if anybody knows what can be done under Australian contract law to stop a dishonest company from continually extending the time on a contract without compensation?
     
  2. Sarah J

    Sarah J Well-Known Member

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    Hi Kye,

    1. Is this a contract between the builders and a business (e.g. developer company or management company) or between builders and an individual?

    2. What does the contract say regarding: (i) time being of the essence (i.e. time is important); and (ii) delays; and (iii) penalties for breaching a time or delay term?

    3. You can try the following, if you haven't already:

    • Talk to the builders directly and informally (making sure you understand your rights and obligations under the contract)
    • Write a formal letter addressed to the builders outlining your concerns and exactly what you request from them (i.e. prompt written explanation for the delays and expected time frame for completion of x task) and actions you will take if they do not reply within y days and satisfy your concerns.
    • Contact the Building Commission within the Department of Commerce for assistance with dispute resolution
    • Settle the dispute with the State Administrative Tribunal
    • You can also apply to the Magistrates' Court for claims less than $75,000 or the District Court for claims less than $750,000
    The WA Legal Aid website has a good information sheet on building disputes.
     
  3. Kye Jessop-Jolly

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    Hi thanks for answering my question.

    Unfortunately there is nothing in the contract in the way of penalties for going over the completion date. We are new to it all and didn't know to look for things like this. They have completely taken advantage. As it stands I'm not sure there is a legal avenue to put pressure on the company to treat our contract with any urgency or anyone else's for that matter. I was hoping there was a higher governing body to step in and fair up the playing field. Surely these business's can't just do what they like there needs to be some fairness.

    I will be lodging a complaint with the Commission but I'm not sure what I should request.

    Do you think there is any way of claiming a breach and having the contract changed to at least add penalties after the fact?
     
  4. Rod

    Rod Well-Known Member

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    Only if they agree to it.

    Recommend you try mediation and one of the outcomes of mediation might be to add penalty clauses.

    BTW, how long has the delay been to date? And do you have a completion date in the contract? How much money have they received of the total contract (eg 50%). A possible breach is they have gone past the completion date allowing you to claim a breach and maybe terminate the contract. Without reading the whole contract it is hard to give definitive advice.
     
  5. Kye Jessop-Jolly

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    Hi. We are meeting with them on the 29th. To answer your questions, our contract is up on the 25th Nov. It has been 11 months since the start of construction. Our ceilings aren't even in yet. No plaster, bugger all.
    As for the completion date it states 220 Working Days but I have got confirmation it is to end on the 25th.
    As for payments they were paid roughly 70-75% back in April. Not sure how but they were.
    I'm not sure about terminating the contract? What would be the outcome of such a move?
    I don't think other builders are in the game of clean up jobs. We will be requesting clauses to be added and will be attempting mediation if a suitable offering isn't put forward.
     
  6. Sarah J

    Sarah J Well-Known Member

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    Hi Kye,

    With the Commission, they usually advise on a reasonable solution based on what solutions you would be happy with. You can either request they complete the building (i.e. extend the completion date) and it would not be unreasonable to ask for compensation for the delay, or terminate the contract on the completion date on the grounds of their breach (i.e. rescind the contract) and ask for compensation for breach of contract this way. You can find another building in the meantime to complete the works after completion date passes and claim the costs for the new buildings from the old buildings as part of damages. The Commission may only be able to get you part of that. If you seek more, you may have to go to arbitration or court.
     

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