FOR BUILDERS

THE OWNERS / PRINCIPALS FOR OUR PROJECT REFUSE TO PAY FOR VARIATIONS. WHAT CAN WE DO?

For most commercial projects, your right to recover additional payments for variations will depend almost exclusively on the terms of your contract.

However, there may be circumstances where variations have been carried out without written agreement (and not in compliance with the terms of your agreement with the owners / principals) where recovery may still be possible. This is particularly so where you can show that the owners / principals requested the variations and were aware that the variations had been carried out.

Contact us to find out more.

For residential projects, whether or not you can recover additional payments for a written variation will depend on whether the written variation was issued in accordance with the contract and whether the variation was carried out. These will generally not be controversial issues.

Rather, the most frequent area of dispute relates to unwritten variations.

Prior to 2019, builders could rely on an equitable principle known as quantum meruit in order to recover payment for unwritten variations carried out on residential construction projects.

However, in 2019, the High Court issued its judgment in Mann v Paterson Construction [2019] HCA 32. In doing so, the Court held, in substance, that a Builder’s rights to recover payment for unwritten variations for a residential building project is limited to recovery under s38 of the Domestic Building Contracts Act 1995 (Vic).

Unfortunately, this means that Builders can no longer rely on the principle of quantum meruit in order to recover payments in these circumstances.

This is significant, because s38 of the Domestic Building Contracts Act 1995 (Vic) provides a far narrower mechanism for recovery.

However, since 2019, we have been involved in a number of matters where, despite the absence of signed, written variations, we have helped our builder clients to recover significant amounts for variation works carried out.

Contact us to find out how we can help you make sure you get paid for your work.

FOR OWNERS

OUR PROPERTY HAS SIGNIFICANT BUILDING DEFECTS. WHAT CAN WE DO?

If the construction of your property was recently completed, you may be able to compel the Builder to repair the defects pursuant to a defects liability period contained in your building contract.

Most standard form residential building contracts provide that for a certain period following the completion of a property, the Builder is required to rectify any defects that become apparent. This is known as a defects liability period. Most diligently prepared building contracts will provide for a defects liability period of at least 90 days.

If your property was completed some time ago, or if you are a subsequent owner of the property, you will likely need to rely on the domestic building statutory warranties that form part of every residential building contract pursuant to s8 of the Domestic Building Contracts Act 1995 (Vic).

The statutory warranties outlined at s8 provide that every contract for domestic building work in Victoria must provide certain warranties relating to the quality of materials to be provided and the work to be completed. Further, s9 of the Domestic Building Contracts Act 1995 (Vic) provides that these warranties run with the property, which means that subsequent owners can also claim under these warranties.

These implied warranties are supported by the requirement for each registered domestic builder in Victoria to hold domestic building insurance, which provides coverage in the event of a claim under the implied warranties or for non-completion of works.

However, it is important to note that, pursuant to the Building Act 1993 (Vic), a claim can only be brought under the implied warranties for a period of up to 10 years. Further, the domestic building insurance held by most builders does not necessarily provide coverage for ALL loss that results from a breach of the statutory warranties.

Contact us today to find out how we can help you protect your most important asset.