Special Conditions on Construction contract

Hi guys,

Just signed a MBA contract with the builder for a 2 unit townhouse development. I understand that the MBA contract is standard. However, not sure if there is any issues with the Special conditions include. I was hoping if anyone can review and let me know if anything is out of the ordinary.

SC1: The commencement date constitutes and commences upon the commencement
of underground plumbing works.

SC2: If any unforeseen ground conditions or hazardous material are encountered during
excavation that has not been noted on soil report extra cost incurred by builder will be passed
on to the owner(s).

SC3: The owner(s) acknowledges the warranties provided by the suppliers and service providers
may require the owner(s) to pay for regular maintenance and inspections like termite treatment,
appliances, air conditioning and ducted heating units etc.

SC4: Local council and sub-division compliance requirements following the issuance of
occupancy permit do not form part of the construction period in the contract.

SC5: The Specifications, plans and drawings provided to the Builder are attached and form part of
the Contract, the Builder has provided a quote based on this information. All contractual
allowances included within the Contract are included within the Builders quote, unless excluded
under these Special Conditions; no other allowances are included in the Contract Price.

SC6: The Owner is prohibited from attending the site without the Builder’s permission, said
permission shall be reasonably granted by the Builder to the Owner upon reasonable notice from
the Owner requesting access and only upon the Builder’s reasonable terms for access, which may
include but are not limited to, a set time and duration for access during business hours and
subject to the availability of site supervision.

SC7: The Owner is prohibited from engaging, communicating and or giving directions to any of the
Builders subcontractors, tradesman or general staff. All communication and directions must be
given to the Builder and or the Builders nominated representative.

SC8: The Owner agrees where engineering, geotechnical or architectural documentation is either
unavailable or incomplete at the time of signing this Contract that the Owner may be liable for
additional costs arising, including but not limited to structural steel, rock, contamination and slab or
foundation alteration. The parties agree that a reasonable estimate has been made for the
excavation, foundations and slab in the Contract Price based on the information available to the
Builder and that any increases in these items will be treated as a Provisional Sum Allowance.

SC9: The parties agree that the Builder is entitled to change, alter or replace an external or
internal item or material provided the change, alteration or replacement complies with all
Australian Standards and building regulations and produces an equivalent finish.

SC10: The Builder shall be entitled to issue all Extension of time (EOT) claims on a monthly
basis, on or before the 15th day of the subsequent month. Upon receipt of the EOT claim the
Owner shall have 7 days to object, failing which the claim will be deemed accepted by the Owner.

SC11: This Contract is only for construction within the property boundary (no civil works or any
related works outside the boundary are included in the Contract price), this includes but is not
limited to, any Protection Works and any notices or forms under Part 7 of the Building Act 1993.

SC12: If for any reason whatsoever the Building Surveyor, Council, Engineer or Architect alters
the plans, drawings, specification and or any other aspect of the works in any way from the said
documents attached to this Contract then these works constitute additional works not included with
the Contract Scope of Work and will be charged to the Owner as a variation to the Contract.

SC13: Should any dispute arise between the Builder and the Owner in relation to defects and or
the completion of the Works under this Contract, the parties shall be prohibited from commencing
tribunal or court proceedings until they have referred and received a recommendation and report
from either Phillip Naughton of APCCO or Trevor Jeffrey of Construction and Asset Management
Consultants as building consultants (the Building Consultant). The appointed Building Consultant
shall review the issues and or dispute as articulated by both parties, inspect the property in
relation to the issues and or dispute, if required, and prepare a report in respect of his findings.
All costs associated with the Building Consultant shall be equally paid for by both the Owner and
the Builder.

SC14. The Owner is responsible for all Services, Facilities and their connection, including all
fees and contributions. The Owner agrees to make all enquiries and undertake all investigations
in relation to all fees and contributions regarding Services, Facilities and Connection fees, and
releases the Builder in relation to these matters.

SC15. Upon the obtaining of the Occupancy Permit the Owner will immediately take out a Home
and Contents Insurance policy to adequately cover the Works. The Owner releases, indemnifies
and holds indemnified the Builder in the event that they fail to obtain the said Home and Content
Insurance.

SC16: Subject to finance approval

SC17. Fixed price contract


Thanks in advance.

 

You've just committed yourself to >$500k to a building contract. Have you sought independent legal advice?

SC1 - why doesn't time run from handover? This is unusual - is there a delay getting a plumber?

SC2-4,8,11,12,14,15 exclusions/variations are at your cost. Owner's obligations.

SC5 Have you satisfied yourself of the adequacy of the allowances? How are these to be adjusted?

SC6-7 Keep your hands in your pocket & engage brain before opening your mouth.

SC9 Right to substitutions

SC10 Does this clause contradict the clause in the body of the contract?

SC13 Appointment of arbiter

SC16-17 Who's finance requires approval? Variations don't form part of the fixed costs.

 

Why have you signed the contract if you aren't sure about those special clauses? You should take them to your lawyer and have the consequences explained to you so you can decide if you want to accept, ammend or refuse those conditions.

 

That looks the perfect job for a solicitor. Oh no, post it on a forum and hope a retired school teacher or pubic servant finds the issues and advises you. If you cant afford that advice dont build.

Normally legal advice on contracts occurs BEFORE you sign anything.

 

Thanks. Correction , haven’t signed yet! And will be getting a solicitors advise

 

Hi Paul, thanks. Correction- haven’t signed yet. Just wanted the forum’s opinion. Will be getting solicitors advice

 

Excellent insights thanks you. correction haven’t signed yet. But will sought solicitors advice