Christmas Shutdown – How it affects your building projects

Whether you are building a new house, adding an extension to your home, or renovating a kitchen or bathroom, it is essential to keep track of time and make appropriate allowances if the project is delayed.

With the upcoming Christmas closure break for many trades and suppliers, builders need to have forward planned for this in their project timeline. Failure to do so may lead to development delays which can quickly result in disaster and trouble for contractors, increasing in time related expenses and exposing the builder to dreaded delay damages.

It’s important to focus on the commencement date

You will need to be aware of the commencement date of the building period. Under the Domestic Building Contracts Act 1995, the following needs to be adhered to:

  • How the start date will be determined (for example, 21 days from obtaining the building permit).
  • If the date is not clear or specified, the contract must also include an assertion that the builder will do everything reasonably possible to ensure work can start as soon as possible.

Always allow for delays in your contract

The builder must make a reasonable allowance for delays caused by:

  • Extreme weather conditions, taking into account the season in which work will be carried out
  • Foreseeable factors, such as:
    • public holidays, rostered days off and weekends
    • breaks in continuity of work (for example, time to let the slab cure)
    • other delays due to the nature of the work.

The builder or contractor must consider how many days have been allowed for each type of interruption or delay. This is outlined in section 32 of the Domestic Building Contracts Act 1995.

Whilst it may not be possible to estimate how long a delay is likely to be, the builder must identify the cause of delay in the contract and state reasons why it is not possible to estimate. This is to ensure all persons involved are clear about what delays can be expected in the project.

Delay damages

Liquidated Damages are a predetermined amount that can be claimed by one party against the other when there is a delay to construction.

The amount set in the Liquidated Damages clause is agreed upon by the parties at the time of contract signing. The amount should represent a genuine pre-estimate of the loss which would occur to the party who did not cause the delay. For this reason, the amount should never be set as $0.00.

If the amount set is exorbitant in comparison to the likely loss to be incurred the Court will view this as a penalty and may render the Liquidated Damages clause in the contract unenforceable.

In order to minimise the chance of a dispute in the future, we recommend that you always obtain legal advice prior to executing any domestic building contract.

Our services

Oldham Construction Lawyers has successfully provided assistance to contractors in making (and defending) claims for both delay and disruption on projects.

While claims can be unpleasant and time consuming, we will provide full attention and assistance to all our valued clients to assert and enforce their contractual rights.

Your building project matter will be handled by our Director, Daniel Oldham and his dedicated team, who will strive to resolve any issues in the most efficient and cost-effective manner.

To arrange an appointment today, please call Daniel on (03) 9640 0002, or via email info@oclawyers.com.au