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How to prevent building disputes

By Meika McHardy - 4 Jul 2018

Building disputes can be very costly to resolve and cause both parties a lot of stress. If a dispute arises before construction is complete, building work is often suspended until the dispute is resolved. This can cause delays and can put unfinished work or materials on site at risk of damage. On residential projects in particular, a homeowner will be very invested and emotions can run high. Fortunately, there are things all parties can put in place to help prevent disputes.

Disputes can quickly escalate and cause a breakdown in trust between parties. When there is an irretrievable deterioration in the relationship, one party may purport to terminate the contract. This can cause further problems if they do not have valid grounds to terminate.

Building disputes arise for a variety of reasons but the most common disputes on residential projects relate to:

  • delays
  • disagreement over what is a variation to the scope of work
  • allegations of defective workmanship; and/or
  • overcharging.

At the crux of the dispute is often a misunderstanding of rights and obligations of the parties under the relevant building contract, a lack of communication and/or a budget blowout.

By far the best way to prevent building disputes is for the parties to invest time at the outset of the project to thoroughly identify the scope of work and any potential issues. Once the parties reach agreement on the issues, it is critical that the building contract properly reflects and records that agreement. This process can be quite daunting and indeed even an impossible task for parties who do not have specialist experience. Getting expert advice can save a lot of heartache and cost further down the track.

Once the project is underway, it is critical for the parties to record all variations (preferably all discussions) in writing to avoid miscommunication. A written record of any agreed change is also crucial evidence should a dispute arise. A prudent builder should also keep the homeowner updated in writing about all issues that cause delays and invoice regularly on charge up jobs to avoid nasty surprises. Shock budget blowouts can often be avoided by keeping a homeowner informed about how variations will impact on the final price.

Where issues of quality of workmanship arise, the joint appointment of an independent building surveyor to assess workmanship and identify any genuine defects will also assist parties in reaching agreement on any remedial work that may be required.

At the end of the day, however, even the best laid plans can go wrong and the unpredictable can and often does happen. If you do end up caught in a building dispute, getting specialist legal advice as soon as possible is your best chance of achieving a speedy and cost effective resolution.


Meika McHardy

Geoff Hardy


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