Excessive Extension of Time requested by builder

Hi all,

I am currently in the process of renovating a small terrace in Sydney and the experience has been less than ideal given the circumstances.

The renovation started in March 2020 with a September 2020 end date. With the wet weather and lockdown in Sydney, the end date got pushed back to 08/12/2021. We are now in the latter part of January and after emailing the builder about getting a lawyer involved to terminate the contract due to the excessive delays, the builder sent out a claim for 81 days due to material and labour shortage. There was no evidence attached in the request letter and I really do not want to give the builder a get a free out of jail card given they have pulled this before. At this stage, I intend to go ahead with a breach notice and dispute this claim.

While I am not looking for specific legal advice, I would appreciate your opinions and experience in dealing with this. I am thinking of requesting for evidence that they have planned and executed the next stage of construction by paying deposit for materials etc. What do we think?

 

What does the EOT clause in the contract state for your time to object to the claim, how is it to be handled, what is the dispute resolution process? Once you have read your contract, then you will have an inkling on how to proceed - you will only have a short window to dispute.

 

The contract is an HIA contract. I have attached the clauses below, it does not include COVID related delays...

I am looking to terminate as there are red flags that they are running into financial trouble. They had two winding up applications against them last year, one was clear and the other is still running.

At this stage, I might try and claim liquidated damage for the delays for the loss of rent/ interest on loan and see what would happen.

 

Are you outstanding much money presently?

What's the scope of the reno? How much is completed?

 

Hi Sackie,

HIA contracts are front loaded of course but I was advised by the lawyer the difference might be claimed via the HBCF icare.

The scope of the reno is to demolish the rear and build a second floor extension to add an extra bedroom and a bathroom. We are up to fixing stage the builder has already claimed 300k of the 400k in the contract. Contract price exludes approval, plans and certificates. The builder is very responsive but everytime I get an answer it is just we will get back to you next week ...

My main concern is that the builder has aleady been served a winding up notice last year by one of his sub-contractor, and that he is in denial about it all ...

 

Yeah tough one. I'd go through the dispute resolution channels first and see where that leaves you. Trying to claim LDs from a sinking boat may be tough. If you can get most of your money back for work not completed yet, that's what I'd try to do then find a new contractor .

 

I would be seeking legal advice.

The winding up issue is normal in industry and likely refelects the Security of Payments Act NSW process and should pose no concerns for actual winding up. If it does it doesnt preclude you from paying it may just mean an administrator or liquidator will take over. This issue seems more about how much to pay the builder so that you dont have $150K of work to be completed v $100K of payment owing under the contract.

Have you consideered engaging a independent construction person to estimate that ? Perhaps a QS ? If they told you the residual work to be completed is $75K and you owe $100K it may put you at rest. And if its $120K it may provide suitable support for a offer to pay less until further progress occurs.