Builder liability for damages to neighbouring property contract clause concern

Hi everyone.

My wife and I are in the process of doing a knockdown rebuild using a well-known mainstream project home builder.

We are at contract stage and we are currently reading through the fine print.
They are using the standard HIA NSW Residential Building Contract for New Dwellings.

There is however a Special Conditions section where the HIA contract allows the builder to add their own terms & conditions.

Most clauses are fine but one really concerns me. Here is what it says.

"The builder is not responsible for any damage to any neighbouring or adjoining property arising from the building works including but not limited to any damage arising from site excavation, water diversion or vibration. The builder is not responsible for any damage to any footpath, curb, gutter or trees arising from the building works."

Surely this is not something I would want to agree to.
Surely if a neighbouring property is damaged by the builder whether accidental or negligent, they are liable. Wouldn't the builder have insurance to cover this? Or are we as the land owner required to get insurance?

This is our first new home build so we are unsure what is considered normal practice.
Any advice would be appreciated.

Thanks
Andy

 

try to negotiate out of it.

 

Yeah even if you decide commercially to accept the risk of a clause like this you'll still want to tighten it up a fair bit. Eg, define neighbouring property, or better still specify exactly what damage to exactly what property the builder would be indemnified for.

Also, any damage to any gutter or footpath or tree? So even if he say chops down a neighbours tree by mistake? What about if he damages the footpath 2 doors away if say his supplier was a bit careless with delivery of something?

Personally I'd try to remove it all, maybe considering a very tightly worded exemption If he can clearly explain to you why it is necessary and not him taking the pis#.

It may end up that he wants to get you to foot the bill for someone to do a dilapidation report on neighbouring property prior to and post demolition, to document and confirm if any damage etc, that would be a far more appealing outcome, with him still bearing all the responsibility in the event of any damage caused.
Otherwise you could end up in between an opportunistic neighbour and a disinterested hands off builder and it can get complicated and expensive pretty quickly

 

Very high risk to you. Try to have it removed.
Builder should have insurance which covers such possibilities - maybe ask about that

 

Thanks everyone for your time and advice. I will speak to them and see what is possible.
As mentioned, this is a mainstream home builder eg Metricon so I'm surprised that this is their standard contract. I wonder how many people dont read their contract and just sign off.

Is it worth me speaking to HIA about this clause or are they not interested in this sort of thing?

Thanks again
Andy

 

No, it's pointless - they represent their members.

You need a construction lawyer. My concern is that they are contracting out of their own negligence and I would be seeking to limit my own exposure to defaults that you control not taking on the builder's or their contractor's failings.

 

Not committed yet. Just at contract stage. I have sent off an email asking them to remove this clause altogether. Let's see what they say..