Regulator issues guidance about home building contract rules
Western Australia’s building regulator is reminding builders and their clients that any increases in the price of a home building contract must comply with legislation.
The guidance from Building and Energy follows a sharp rise in enquiries from home owners about unexpected price increases to their fixed-price home building contracts, as well as about delays to building work.
Building and Energy Executive Director Saj Abdoolakhan said the supply of building materials has been affected by the COVID-19 pandemic and increased building activity following the State and Federal stimulus grants. There is also a genuine labour shortage affecting Western Australia’s building industry.
“While I appreciate that the sudden demand for building work has seen an increase in some trade pricing, builders need to ensure they comply with their contractual obligations under the law,” Mr Abdoolakhan said.
The Home Building Contracts Act 1991 sets out minimum contracting terms for fixed-price contracts entered into between home owners and builders valued between $7,500 and $500,000.
The Act permits a builder to increase the price of the contract in limited circumstances, including when there has been a delay in commencing work of more than 45 working days, providing the delay was not the fault of the builder.
“Building and Energy is investigating a number of complaints in relation to contract variations to assess whether the circumstances involved are reasonable,” Mr Abdoolakhan said.
He is encouraging home owners to contact their builders to understand how delays or material shortages may impact their work and how they are managing the situation.
Home owners are also advised to check their contract carefully before signing it, including the time allowed for the builder to commence and to complete the building work.
“Home owners should consider seeking independent legal advice before agreeing to variations that increase the cost of their home building work contract for situations other than those provided for in the Act,” Mr Abdoolakhan added.
Building and Energy has published a guide on price increases to home building contracts due to a rise in the cost of labour, materials or both.
An owner or builder who believes there has been a breach of the Act or a home building work contract – including delays that result in completion of work after the time allowed for in the contract – may be able to seek a remedy under the Building Services (Complaint Resolution and Administration) Act 2011.
Further information on lodging a complaint is available at the Building and Energy website or by calling 1300 489 099.
Media contact: BEmedia@dmirs.wa.gov.au
Building and Energy’s Guide on price increases to home building work contracts: https://www.commerce.wa.gov.au/sites/default/files/atoms/files/price_increase_to_building_work.pdf
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