How to Resolve Common Home Building Disputes With Your Builder: Tips for Homeowners

Throughout the course of building their own home, homeowners may face a range of disputes with their builder. The most common disputes involve poor quality of works/defects, delays in delivery of the project or meeting certain milestones, unexpected variations, budget overruns and builders abandoning the project. Understanding these common construction disputes and knowing how to address them can give you an edge in protecting your interests and ensuring that the construction of your home is completed on time, within budget and to a satisfactory standard.

In this article, we provide an explanation of the common home building disputes you are likely to encounter and tips on how to resolve them.

1. Poor quality of Work/Defects

Construction work must be carried out by appropriately qualified tradespersons. The works must also comply with any plans and specifications as well as the relevant building codes and regulations such as the Building Code of Australia (BCA) and the National Construction Code (NCC).

Poor workmanship and defects in work should be identified early as the rectification works will be a lot cheaper than if left unattended.

Tips to resolve disputes relating to defects in building work:

• Review plans, specifications and scope of works to determine how the works are to be completed.

• Conduct regular inspections of the works being completed. If you suspect the works are not of a proper quality, then consider engaging another qualified person to assess the works completed.

• Keep detailed records and take photographs of all defective works.

• Communicate with the builder as soon as a defect is found and negotiate any repairs necessary.

2. Project Delays

The building contract will provide guidance on the construction program and will identify the due date for completion of works. Any delays to the due date for completion usually results in increased costs to the homeowner, including:

• Holding costs (such as interest costs);

• Additional expenditure in the form of rent if the property is not habitable and you are renting while your home is being built;

• Additional construction costs if you are required to hire additional trades to help speed up construction to stay on track with any deadlines.

Tips to resolve disputes relating to project delays:

• During negotiation of the contract, make sure that the project timeline is realistic. If not, then question the builder on whether the timeline is achievable.

• During negotiation of the contract, consider negotiating a term into the contract which incentivises the builder to complete the project ahead of the timeline e.g. a bonus payment for early completion.

• Actively monitor the works and cross check with the project timeline. If the works are lagging behind, you will need to inform the builder that they are delayed in delivery.

3. Variations

Sometimes builders raise variations for works which they consider to be out of scope. These variations usually result in an increase in costs of construction for the homeowner.

The scope of works attached to the contract will be the source of truth when dealing with a dispute as to variations. If the works are contained in the scope of works but the builder has failed to budget for it, then it is highly unlikely that the builder will be entitled to the variation.

Tips to resolve disputes relating to variations:

• Review the scope of works to make sure that the variation is a legitimate variation.

• If you approve any variations, make sure you document the approval in writing. You should keep track of all variations which have been approved and those which have been rejected.

• Any requests for a variation should be supported by detailed cost estimates to help you assess the impact on your budget.

4. Budget Overruns

Budget overruns are usually a result of poor budgeting and/or a failure to properly stage the works. Underestimations of the costs of the works and poor management by the builder cause tensions to flare between the parties. This usually results in the homeowner refusing to pay and the builder refusing to complete the works.

Tips to resolve disputes relating to budget overruns:

• Ensure the builder you select has experience with similar projects. An experienced builder will be able to more accurately price up the works with minimal deviation from the budget.

• Ensure the budget is as detailed as possible. A detailed budget increases the accuracy of the project cost.

• Regularly review the budget and compare against the works completed. If you notice the budget is being exceeded, then you need to urgently speak with the builder.

5. Builder Abandoning the Project

In some cases, builders may abandon the project, often as a result of non-payment of an invoice. However, builders must comply with the terms of the contract and relevant laws before abandoning a job. Failure to do so can result in legal action against the builder for loss which you may suffer as a result of the abandoning of the project.

Tips to resolve disputes with a builder who has abandoned the project:

• If a builder is threatening to abandon the project, try and understand why they are doing so. You may be able to resolve the issue then and there. It is generally more costly to start again with a new builder.

• Review the contract and understand when a builder is entitled to abandon the works and/or terminate the agreement.

Still Need Help With Your Home Building Disputes?

Our experienced Building & Construction Lawyers specialise in resolving building disputes with a focus on protecting your interests. We take a commercial approach to ensure all building disputes are handled efficiently and effectively. If you're facing any issues regarding the construction of your home, we encourage you to reach out to our office for expert assistance.