What happens when you’re renovating or building a new house, the work is supposed to be finished by a particular date (which has been and gone) but there are delays and more delays? On top of that, the Builder is not answering his phone and the tradespeople have stopped turning up for work.
What can you do to get your house finished?
Before engaging a different builder, You as the Homeowner must take care to properly terminate the contract with the first Builder. This is important because engaging a new builder to finish the works without having properly terminated the original contract can create a potential legal problem for the Homeowner.
A Homeowner could be seen as having wrongfully repudiated the original contract which might expose the Homeowner to a claim by the first Builder for breach of contract. We have seen numerous building disputes where the Homeowner, who has been let down by defective building work, ends up having to defend a claim by the Builder.
Read the Contract!
The first step is always to refer to the Contract . The Contract usually provides a procedure for the Homeowner to terminate the contract if the Builder is in default. That might mean you need to provide the Builder with a written notice (often referred to as a “notice of default”, “notice of breach” or “notice of intention to terminate”) that:
- identifies the Builder’s defaults of the Contract. For example a failure to complete the works by the stipulated ‘practical completion’ date, defects in the building work that require remedy, or failure to progress the works in a timely manner in accordance with the timetable); and
- require the Builder to remedy the default within a period of time; and
- if needed, advise your intention to terminate the contract if the Builder fails to comply with the notice.
When serving any notice on the Builder, the Homeowner should ensure that the document is served in accordance with the requirements of the contract. Again, most building contracts set out how a notice can served on the Builder, for example, by sending the document electronically to a particular email address.
Who’s the Builder?
Where the Builder is a company and the contract does not provide for a method of service on the Builder, the Homeowner can serve the notice by mailing the document to to the address of the company’s registered office. Information about a company’s registered office can obtained through a search of the Builder’s company records maintained with the Australian Securities and Investments Commission which are available to the general public.
If after a notice of default/intention to terminate has been served on the Builder, and the Builder still fails to make good the defaults within the timeframe stipulated in the notice, the contract can then be terminated by serving a further written notice of termination.
It is important that the Homeowner properly terminates the contract by observing the procedure set out in the contract, so as to avoid a legal dispute if the Homeowner later engages a different Builder to complete the works.
Please do not hesitate to contact Lighthouse Law Group on (02) 9744 9236, if you require assistance or advice regarding your new home or renovation project.