Regulator points steerage about residence constructing contract guidelines

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The Western Australia Building Inspectorate is reminding builders and their customers that any price increases on a housing contract must comply with the law.

Building and Energy’s guidance follows a sharp surge in inquiries from homeowners about unexpected price increases on their fixed-price housing contracts and delays in construction.

Building and Energy Executive Director Saj Abdoolakhan said the supply of building materials has been impacted by the COVID-19 pandemic and increased building activity following state and federal stimulus grants. There is also a real labor shortage in the construction industry in Western Australia.

“Although I recognize that the sudden demand for construction has caused some retail prices to rise, builders need to ensure that they are meeting their contractual obligations under the law,” said Mr. Abdoolakhan.

The Home Building Contracts Act of 1991 establishes minimum terms and conditions for fixed price contracts between homeowners and builders valued between $ 7,500 and $ 500,000.

The law allows a contractor to increase the price of the contract in certain circumstances, including a delay in the start of work of more than 45 working days, provided that the delay was not the fault of the client.

“Building and Energy is investigating a number of complaints related to contract amendments to assess whether the circumstances are appropriate,” said Abdoolakhan.

He encourages homeowners to contact their builders to understand how delays or material shortages can affect their work and how they are dealing with the situation.

Homeowners are also advised to carefully review their contract before signing it, including the amount of time the builder has to start and complete the construction.

“Homeowners should consider seeking independent legal advice before agreeing to changes that increase the cost of their building contract for situations other than those provided for by law,” added Mr. Abdoolakhan.

Bauen und Energie has published a conduct in the event of price increases in housing contracts due to an increase in wage and material costs or both.

An owner or builder who believes there has been a breach of the law or a home construction contract – including delays that result in the work being completed after the time allotted in the contract – can use the construction service (complaint resolution and administration) Act 2011.

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