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PLUMBING CONNECTION
WINTER 2016
DO YOU NEED A WRITTEN
‘PROJECT’ CONTRACT?
T
he issue of recording ‘project details’ in a written form
is of little interest to some in the building industry;
however, as a builder, the process is in fact critical for
a number of reasons.
Of course, generally speaking, with any type of business
dealing, at least the key terms of the dealing should be
written down to avoid pitfalls down the track, chief among
them being avoidance of disputes.
It is a fact of human nature that people will view a
situation in a manner favourable to them, and of course, in
a dispute involving events that may have occurred some
months or even years previously, there is plenty of room for
differences of opinion, and memories fade.
These differences of opinion can result in much stress,
loss of time, productivity, and of course money.
ESSENTIAL TO KNOW FOR BUILDERS AND OWNERS
Though a written contract is not actually required in some
instances, in others the law requires it.
Broadly speaking, when work is done on a home such as
the building of one from ‘scratch’, including associated work
such as landscaping, paving, building of driveways, fences,
retaining structures, garages, carports, workshops, pools
and spas, demolition or removal of a home, and various other
pieces of work such as site work, work to do with plans, and
lighting, heating, ventilation, air-conditioning, water supply,
sewerage and drainage, the Domestic Building Contracts Act
applies to the work.
In addition, importantly, in cases of renovation, repair,
alteration, extension or improvement of a home, the Act
applies.
The critical consequence of the Act applying (note that
as the name suggests, the Act only applies to domestic
or home building work) is that in cases of work exceeding
$5000 in value, a written contract is required. Then the
contract is termed a ‘major domestic building contract’.
A copy of this contract must then be given to the owner
within five days of the entry into the contract. A daily (for
every day of non-compliance) penalty applies for a builder if
this is not done.
Of course, there are works which are not covered, being
exceptions to the law, as there often is.
In cases of work involving farm buildings, or work involving
business premises, buildings to house animals, specified
design work, work involving the obtaining of foundations
data, and transport of a home from one place to another (i.e.
removal and transport of a ‘transportable’ or ‘removable’
home) the Act’s requirements do not apply.
In addition, and commonly, where work is for only one type
of work (and there is a long list of included works, such as
electrical work, attaching of awnings, balustrades, security
screens, and insect screens, glazing works, laying of floor
coverings, painting and plastering works, specified types
of plumbing work, enclosing a tennis court with a chain link
fence, and finally, erection of a pole, antenna, mast, aerial or
similar structures) a written contract is not required.
Less commonly, there is an exemption for types of work
based on the particular type of premises, where parts
of such premises are or can be lived in, such as prisons,
schools, universities, and youth and community centres.
Finally, works associated with subdivisions are excluded.
Note that it is critical for a builder to not enter into a major
domestic contract as described if they are not registered.
IT CAN BE EASY TO AVOID WRITING THE DETAILS OF PARTICULAR JOBS WHEN ALL YOU WANT TO DO IS GET IN, GET
THE JOB DONE AND GET OUT; HOWEVER, AS
PAUL COTT
EXPLAINS, THAT ISN’T THE RIGHT OPTION.
LEGAL MATTERS
PAUL COTT