Building and Construction Disputes.

 

Requirements for Domestic Building Contracts

As of 1 August 2017, the threshold amount for a major domestic building contract increased from more than $5,000 to more than $10,000.

The threshold amount above which cost-plus contracts are permitted has increased from $500,000 or more to $1 million or more.

For a cost-plus contract entered into before 1 August 2017, the limit remains $500,000 or more.

As of 1 August 2017, in a major d domestic building contract, the contract must be in writing and complies with the requirements of Part 2 and section 31 of the Domestic Building Contracts Act 1995 (Vic) (“the DBC Act”).

The builder also must give the owner a copy of the Domestic Building Consumer Guide before the owner signs the major domestic building contract.

The written contract, for a major domestic building contract, which exceeds $10,000, would include building works such as:

  • erecting or constructing a home and associated landscaping, paving, retaining structures, driveways, fencing, lighting, heating, air conditioning, water supply or sewerage

  • renovations, alterations, extensions, repairs and any other improvements

  • work associated with renovation, alteration, extension or repair of a home. This includes landscaping, paving, retaining structures, driveways, fencing, garages, workshops, swimming pools or spas

  • preparation of plans or specifications by the builder (unless prepared by a registered architect, engineer or draftsperson)

  • demolition or removal of a home

  • any work associated with building on land zoned for residential purposes and for which a building permit is required.

Only registered builders can:

  • enter into a major domestic building contract and take out domestic building insurance, which is required for work over $16,000 and protects the owner if the builder dies, becomes insolvent or disappears

  • reblock, restump, demolish or remove a home, regardless of the value of this work.

When a Problem Arises with Your Builder, Get Help

When property owners are disappointed with the work that a contractor has carried out, construction disputes can often develop.

If building disputes do arise, the first step to resolve them should be to discuss the difficulties with the builder to come to a satisfactory decision.

At Daniel Legal Group, we can help you with your domestic or commercial building disputes against a property owner, builder, sub-contractor, architect, engineer or other building practitioners.

We can provide you with legal advice for disputes about domestic and commercial building works.

We can help you prepare for any mediation to be held at the Domestic Building Dispute Resolution Victoria (DBDRV). If the mediation is unsuccessful, we will assist you in preparing and presenting your case at the Victorian Civil and Administrative Tribunal.

  • Drafting or reviewing your domestic and commercial building contracts,

  • Advising on the progress payments during the construction stages and advising on whether you should be making any payment during a stage that is not fully complete,

  • Advising on any variations in the building works and advising on whether you should agree or disagree with any variation,

  • Organizing a qualified building inspector to inspect the building works at the end of the contract,

  • Advising on the inspector’s report and advising on any building defects which may be reported on by the building inspector,

  • Advising on any breaches of the builder's implied warranties, and advising on the builder’s failure to meet the standard or quality of work as specified in the contract,

  • Advising on building delays and your rights and the remedies available to you,

  • Advising on the termination of building contract by either the builder or the homeowner, and

  • Advising of the remedies available to you if a builder caused damages to other properties on the building site during demolition and removal.

Before You Sign A Building Contract

Before you sign a major domestic building contract, come and see us.

When reviewing your contract, we will make sure that:

  • the builder is registered with the Victorian Building Authority (VBA) by using the Building Practitioners Search on the Victorian Building Authority,

  • the builder is eligible to purchase domestic building insurance,

  • the procedure for changing the plans and specifications are in your best interests,

  • the terms to paying progress payments for work already completed are sufficiently defined, and

  • thoroughly review the contract and make sure that important terms affecting your ability to claim liquidated damages are sufficiently articulated in the contract.

When reviewing your building contract, we will make sure your contract does not include illegal terms such as:

  • a clause requiring any dispute to go to arbitration (a compulsory arbitration clause),

  • a caveat on the building site land,

  • any statement that restricts or denies your rights to implied warranties,

  • a cost escalation or ‘rise and fall’ clause, unless the contract price exceeds $500,000.

  • if the builder wants to include a cost escalation clause, the Director of Consumer Affairs Victoria must approve it.

You are not required to have a domestic building contract for jobs that involve only one of the following:

  • plastering

  • tiling (wall and floor)

  • electrical work

  • glazing

  • insulating

  • painting

  • plumbing, gas-fitting and draining

  • installing floor coverings

  • attaching external fixtures (awnings, security screens, insect screens and balustrades)

  • erecting a chain wire fence around a tennis court

  • erecting a mast, pole, antenna, aerial or similar structure.

However, it is highly advised to you have a written contract for all work carried out on your property.

Disclaimer: 

This guide should not be relied on as a substitute for obtaining legal advice. It is intended to provide general information only and is not intended to be comprehensive. The contents do not constitute legal advice and must not be relied upon as such. You must seek specific legal advice tailored to your personal circumstances before taking any action based on this publication. 
Should you require tailored legal advice, please contact us.

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