Unfortunately for both builders and home owners alike, things don’t always go to plan when building a home. You can minimise the risks of a dispute by being careful during negotiation of the contract and as work progresses, but you can never eliminate it altogether.
Common disputes involve disputes over variations (was it quoted? Was it approved? Is the cost reasonable?), delays (is a delay the builder’s fault? Does the homeowner have a right to liquidated damages?) and payments (can a home-owner withhold or offset payment due to defective works).
If a dispute does arise, you should not take any action, such as suspending the works or terminating the contract, without seeking advice from an experienced home building lawyer.
Termination of a building contract is a crucial part of securing your right to bring a damages claim, but if you do it incorrectly you will be exposing yourself to a counter-claim. One wrong decision at the early stages of a dispute could severely limit the remedies available to you later.
If the parties to a dispute cannot settle the matter, proceedings are often commenced in the NSW Civil and Administrative Tribunal, which has jurisdiction to determine home building claims up to $500,000.
The process before the Tribunal would typically include:
- Preparation and exchange of evidence (including lay evidence from the builder/home owner, and importantly, expert reports);
- An expert conclave (where the experts from both sides produce a joint report in which they seek to achieve common ground);
- Mediation; and
- A final hearing.
Depending on the complexity of the dispute, these proceedings can take anywhere from three months to one year to be resolved.
For more serious disputes (in excess of $500,000), the parties will find themselves in the District or Supreme Courts.
The stakes are often high: A builder will often not have the funds to pay an award for damages in the order of hundreds of thousands of dollars, and the home owner will be motivated to place them into insolvency/bankruptcy (a necessary pre-requisite to enable reliance on the Home Owners Warranty insurance policy). As such, it can be a battle for financial survival for a builder. For home owners, the claim will represent the one chance they have to complete their dream home (which may, as a result of poor building work, have turned into a nightmare).
Building disputes rarely have ‘all or nothing’ outcomes, and a mixed outcome is the most common (that is, where a plaintiff is partially successful and a defendant is partially successful).
Obtaining the right representation, establishing a good understanding of your prospects of success, and entering into reasonable negotiations early is usually the best way to minimise the cost and risk of proceedings.
Our team at Atkinson Vinden has successfully defended, and settled home building disputes in the Tribunal and the Courts.
Our vast experience, as well as our network of highly qualified building experts and specialist barristers, will give you the best chance of achieving a good outcome.
If you require legal assistance or representation in a home building dispute, please contact our team on 9411 4466.