Advice on contract extension QLD

Discussion in 'Legal Issues' started by ralph1, 24th Mar, 2017.

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  1. ralph1

    ralph1 Active Member

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    Hi all
    We have a masterbuilders residential building contract
    Under section 15 - Delays and extension of time
    15.1 (j) Christmas Shutdown
    The contractor sent a notice of extension to us after Christmas, the contract under 15.1 states,
    - Contractor must, within 10 business days of the contractor becoming aware of the cause and extent of the delay, give the owner a written claim signed by the contractor for a reasonable extension of the Practical Completion Date.
    We signed the contract on 29 March 2016 and received the extension notice on 24 Jan 2017, so after the reason for the extension.
    Am I right to think this notice should have been sent out long before Christmas as it is a foreseeable delay and on the date each year.
    We did not sign and did not accept this extension as we were verbally told not to worry about as the house would be well and truly finished before the extension kicked in, it wont be.
    15.4 If the owner accepts the claim the contractor must, within 5 business days of the owners acceptance, give the owner a signed copy of the accepted claim. We have received nothing from them apart from the original claim.
    The contractor is now telling us that they are taking the extension as there is nothing to sign as we have already signed and accepted the contract.

    Can someone clarify this for me please
    Thanks in advance
     
  2. Perthguy

    Perthguy Well-Known Member

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    Could @RPI help?
     
  3. RPI

    RPI SDA Provider, Town Planner, Former Property Lawyer

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    Sounds right up my alley. Would need more detail
     
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  4. ralph1

    ralph1 Active Member

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    Morning @RPI
    Thanks for the reply. Would you mind if I called you on your Brisbane number for a chat.
    Cheers
    Ralph1
     
  5. RPI

    RPI SDA Provider, Town Planner, Former Property Lawyer

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    No problem. If you could email me a copy of contract prior to calling so I can have a look at it in entirety
     
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  6. ralph1

    ralph1 Active Member

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    Hi @RPI I am having trouble finding your email address. I have rung the Brisbane number at the bottom of your page but they couldn't help me. Where do I find it.
    Cheers
     
  7. Perthguy

    Perthguy Well-Known Member

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    Looks like you can find the email address in this old ss thread:

    Recommend me a solicitor/conveyancer in Brisbane
     
  8. ralph1

    ralph1 Active Member

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  9. Perthguy

    Perthguy Well-Known Member

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    Tagging @RPI, although you probably have the email by now!
     
  10. ralph1

    ralph1 Active Member

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    Sorry mate didn't read that properly, thanks for that anyway.
     
  11. RPI

    RPI SDA Provider, Town Planner, Former Property Lawyer

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    You must have used the town planning number. Law firm is where I live and reception at town planning doesn't give out my law firm email so as to keep clear separation from legal practice.. [email protected]
     
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  12. RPI

    RPI SDA Provider, Town Planner, Former Property Lawyer

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    Firstly, the liquidated damages are only set at $70 per day under the contract so we are talking about $700. The delay damages for the builder is set at $200 a day.

    So before even discussing anything in relation to this delay you need to make sure that you have complied strictly with every time frame, every progress claim, information request etc. Otherwise 4 days of their claim blows out yours. If you used a lender for the build the progress claim dates are often breached, especially in this instance as the payment is due withing 5 business days. If your process was builder claims> you send to bank>bank sends quantity surveyor to inspect>bank approves>bank pays builder - then the chances of you being compliant are very low.

    Legally, you are correct that the contractor should have given you notice as soon as they decided on Christmas Shutdown. If they gave you the notice on 24 January then you only had 10 business days to reject it

    What you do about it depends on:
    1. any delays of your own as above;
    2. your relationship with the builder;
    3. any variations you have done or will do ($700 in a variation is easy to make up);
    4. your impression of what they will do if you do push back on the claim.

    Given that you would be pushing back on a pure technicality, that is the date of service of the notice, you should consider any action very carefully. At the time of signing the contract you would have expected a Christmas shutdown period as it was outlined in the contract. The builder would have expected there to be a shutdown also. There was one, it's just the formal notice requirement wasn't given. Given the expectation of parties on both sides (or at least what should have been expected with a build over Christmas) then pursuing something here where:
    1. your best upside is $700;
    2. costs of advice and action would exceed the upside;
    3. the downside could be much greater

    the cons seem to outweigh the pros.
     
    Luke T, Perthguy, New Town and 2 others like this.

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