Top ways to avoid a building dispute in Queensland

From a property owner’s point of view, the vision for the project is finally coming to fruition. From a builder’s point of view, another profit-making job is about to commence……

It is not uncommon for the seeds of a building dispute to already have been sown before a shovel even breaks ground.  Observing the following simple pieces of advice can go a long way towards avoiding a building dispute in the first place.

Tip 1 – Read the contract

 It sounds obvious but it is important that parties to a building contract understand clearly their obligations and what they are getting.  It is surprising the number of parties, be it the principal builder, subcontractor or landowner, who have not taken the time to fully read and understand what is being agreed to. 

Be it a new family home, a medium density residential development or a commercial project, parties to such ventures understandably become excited and enthusiastic when the first sod of soil is turned. 

The contract doesn’t just include the schedule, which summarises the main points of the contract, but also includes the terms and conditions, specifications and plans and can even include other documents specially listed in the schedule.  The devil is in the detail! 

Parties should take the time to read all of the contract documents before signing, as the signed document constitutes the final bargain that is struck, not what they may have thought in their heads they were agreeing to.

Tip 2 – Make sure all required QBCC licensing is in place

Pursuant to section 42 of the Queensland Building and Construction Commission Act 1991(QBCC Act) it is unlawful to carry out unlicensed building work.   Whilerare, it is not unknown for some unscrupulous parties to lend and borrow QBCC license numbers. Always insist on inspecting the physical QBCC license and obtain a copy of it. http://www.qbcc.qld.gov.au/is the QBCC website licensee search facility to check QBCC licensing. 

If contracting with a company, it is important to ensure the company is licensed and that it also has a licensed nominee.  Also check the ABN listed in the contract against the information maintained at the Australian Business Register at https://abr.business.gov.au/. The entity name listed on the Australian Business Register should be the same as that listed on the contract. 

Tip 3 – make sure any variation is agreed to in writing before work commences

Invariably, as a building project progresses, there will be changes to the scope of works. Variations are one of the most common building disputes.  Often times this is because the parties have failed to agree in writing, before the variation goes ahead, to what the exact scope of the variation. 

It’s not uncommon for an oral or verbal estimate to be given based on a cursory discussion about a variation with some vague agreement that the details can be sorted out later.  However, the contract may provide that the builder is entitled to add a margin to the cost of materials associated with any variation.  The variation may turnout to be less straightforward than was first thought!

When the details are sorted out, after the variation has been completed, unsurprisingly a property owner can get hit with a double whammy.  As the contract hadn’t been read in full, there wasn’t a realisation about the right to claim a builder’s margin,which can sometimes be as high as 20%. 

As the price for the variation hadn’t actually been agreed to, there is the inevitable argument about why it cost 50% more than was first estimated. 

All perfect ingredients for a building dispute right in the middle of the job which can then sour the personal relationship between the parties at a crucial time of the project. 

Takeaways

In short: read the contract; make sure the required QBCC licences are in place, and; agree in writing about any variation before it commences.

Links and further references

Legislation

Queensland Building and Construction Commission Act 1991

Related insights

Implications of non-compliance with the Building and Construction Commission Act (QLD) 1991

Further information about building disputes

If you need assistance in relation to any building dispute, contact us for a confidential and obligation-free discussion:

Disclaimer

This article contains general commentary only.  You should not rely on the commentary as legal advice.  Specific legal advice should be obtained to ascertain how the law applies to your particular circumstances.