Construction Lawyer & Building Solicitors Sydney | Contracts Specialist Law Firm

Documents used to show the importance of construction contracts | Contracts Specialist

Importance of Construction Contracts

Why are construction contracts important? And what are the things that clients need to look out for to detect red flags in potentially bad contracts?

A Construction Contract Agreement is a written document that contains everything that is agreed upon by both of the homeowner and the contractor. It carefully outlines the terms and conditions of the agreement, the rights of either party, the amount to be paid, and the date when building work will start, and the expected completion date. As experts in construction law, Contract Specialist understands the importance of construction contracts. It is vital to have a well-written contract if you are to have any type of construction work done, because:

A

The Home Building Act requires it

B

It protects the rights of both the owners and contractors

C

It makes sure that the owner’s plans and conditions are laid out carefully

D

It makes sure that owners and contractors alike are working towards the same direction and the same goal

The Home Building Act 1989 is the law that regulates the residential building industry and certain specialist work in NSW. Its main concerns are home building works such as construction, renovation, and alteration. It also regulates matters such as insurance, contractor licenses, contract prices, warranties for contractors and consumers, etc.

Who benefits from the Home Building Act?

Homeowners primarily benefit from the Act. But since it provides rules for stakeholders, we can say that it benefits everyone in the building and construction industry. Clear guidelines make for better construction contracts. Also, amendments have been made to the legislation to add more appropriate protection for traders and builders. The changes made required homeowners to act promptly and immediately lodge complaints when defects are discovered.

What are other acts/regulations under the Home Building Act?

  • Home Building Regulation 2014
  • Civil and Administrative Tribunal Act 2013 (NSW)
  • Civil and Administrative Rules 2014
  • Delays in building or construction work
  • Poor communication or miscommunication
  • Neglect in building work
  • Poor quality of the work
  • Bad contracts and plans
  • Council approvals
  • Trespassing
  • Payments (Short payment, late payment, and non-payment)
  • Variations (Builders performing variations without the owner’s approval)
  • Builder’s licence (Builder’s name is different from the name on their licence; Unlicenced)

Are the issues (mentioned above) subject to the Home Building Act?

Yes, but it is also governed by the building contract.

Bad Contracts and red flags to look out for

A construction contract with vague details | Contracts Specialist

How do you spot a bad contract?

A poorly-written contract is equivalent to a breach of the law. If you are about to sign a contract, you must look our for these red flags!

  • The contract does not comply with the requirements of the Home Building Act
  • If the rights and obligations of both parties are vague
  • If details such as risks and progress payment methods are unclear

So what should you be aware of before signing a home building contract?

  • Always check the builder’s licence: the name and if he or she is licenced
  • Make sure that the dates of commencement and completion are agreed on and stated on the contract. Calculate if necessary especially that delays may always occur during the building process
  • Make sure that whoever assumes responsibility on certain defects is clear and stated in the contract
  • Make sure that the risks that may be encountered during the building process are included in the contract
  • Make sure that the progress payment method is clearly stated
  • The party responsible for council approvals and building permits should also be agreed upon and written on the contract
  • Documentation may also be an important practice for both homeowners and contractors. Especially when there is a potential building dispute coming
  • Communication is key. A common issue that surfaces and leads to building disputes is poor communication or miscommunication. It is important that owners and contractors alike are in constant communication with each other to avoid issues that may lead to legal conflicts.

In other words, a poorly written contract is considered a BAD CONTRACT.

A construction lawyer giving information on construction contracts | Contracts Specialist

What Contracts Specialist can do for you

The specialist building and construction lawyers of Contracts Specialist have extensive experience in drafting and reviewing a wide range of contracts of our clients – both contractors and homeowners – such as Home Building, Commercial, Lump Sum, and Cost Plus contracts, as well as Subcontract Agreements. We know the importance of construction contracts and how they can affect a homeowner’s investment and a contractor or builder’s business.

Consult with Contract Specialists so you can get some peace of mind. Having a good contract at the start of a construction project is vital to its success. Before signing anything make sure that everything written on that construction contract agreement will be in your best interest. Our construction lawyers can give you confidence before you go into any agreement and we can ensure that well-crafted contracts will help protect you should any legal issues and building disputes come up in the future.

Call Contracts Specialist for a free first consult. It will cost you nothing to know where you stand legally.