(VIC) Builder not following Design Guidelines on new estate

Hi all

Not sure whether this is the right place to post this question but i am having an issue which what seems like a straightforward situation.

Long story short, a builder was engaged to build in a new estate in the west. Given that it is a new estate, there are design guidelines to be followed. This builder is also selling land and package in the same estate so one will think that they are across the developer's design guidelines.

A design plan was sent to the developer for approval, however this has been rejected as it did not meet the design guidelines that was required to be followed.

Now the builder is passing the buck back to us saying that it is our responsibility to highlight to them that whatever they have drawn has met the design guidelines.

What I will like to know is:

1. Whose responsibility is it for ensuring that design of a house build meets the design guidelines when we have chosen their house design in the new estate? Shouldn't this be the builders responsibility?

2. Can this be reported to Consumer Affairs Victoria as a negligence on the builders part for failing to comply with the design guidelines of the new estate?

Thank you.

 

What does the contract say?

 

And...what would your solicitor advise ??? As a buyer you are liable so their advice is important

 

So you haven't started building yet and it's at the stage where it's gone to the land estate for approval before a building permit is lodged?

It probably can be quite easily fixed to meet the design guidelines, what did the land estate say was wrong?

Did you provide a copy of the design guidelines to the builder as part of your design brief and ask them to create a compliant home? Did any of the design changes you requested make it non compliant?

Even if the builder is selling H&L in the Estate they are not privvy to the contract you have signed with the estate and you are the one who entered the contract with the estate to only build a compliant home. If you don't specifically ask the builder to make it compliant then they are dealing with many different estates and can't be expected to know all the design guidelines unless you provide them to them and advise them that they must be followed.

 

How are the design guidelines enforced? Is it part of your contract, or is it a restriction/memorandum of common provisions that is registered on title.

The answer above is quite important, because if the requirement of getting approval from the estate is registered on your title (by either the restriction or MCP), then the builder should have probably been aware, or at least should have asked about it. But if it wasn't registered on title, and you didnt tell them it was a requirement in the contract, then how would they have known?

Its funny, i actually hear about your situation pretty regularly, where the builder doesnt factor in all the design requirements, or drainage requirements, etc on these new estates. And to be honest, i dont blame them. There are a number of different documents from different sources that can affect what can be designed in these new estates, section 173 agreements, covenants/restrictions on the sub plan and as seperate documents, memorandum of common provisions. Some of these documents refer back to the permit and other associated documents (bushfire reports, drainage reports, etc). In some cases the builder might have to read 100+ pages of legalese, and the documents can sometimes be written in a subtle way that the point is not clear unless really thought about. So i can see how they sometimes get caught out.

 

Seems to me as though the builder should make sure the design meets regulations, they have to prepare and submit the plans.
Presumably there's some extra cost involved here?
Referring the builder to CA before starting building isn't really a great start!

 

The design guidelines was provided to them, at 2 separate stages. One is at the sales stage prior to signing of the sales tender contract. 2nd time was provided to them again prior to the contract signing stage. At the contract signing stage, this was raised again as we need to sign contact.

I also did not request for additional changes made to the design. It was their standard design.

 

This is my understanding too. I can understand if they are meant to be additional costs to meet developer guidelines, but shouldn't this be raised at the sales stage? The builder has build so many homes in the estate, surely they can't say there are unaware of the requirement? What's a CA?

 

Don't believe it's a title requirement or council requirement from what I am understanding from your post. It's a developer requirement. And yes the builder is aware of this requirement as they set up a display home in the new estate and I have provided them with the design guidelines more than once.

Am interested to know more where I can find whether whose responsibility in terms of meeting design guidelines. Will this be in my contract? From my understanding, it's a standard HIA contract which can't be changed?

 

My understanding is building permit application has been lodged. Developer approval is the last bit required before it can be approved.

The fixed required are additional eaves, side street windows and facade changes which requirements are clearly outlined in the Design Guidelines which have been provided to them at the sales stage and prior to contract signing stage

We did tell them and have provided design guidelines to them at sales and before contract signing stage.

 

It's just a standard HIA contract. It is actually not stated in the contract on whose responsibility it is to ensure that design guidelines are to be met.

 

I have found further information which seems to back up my position that the builder is not entitled to ask for this variation cost as they are reasonably aware that there will be design guidelines (covenant) to be followed which have been provided to them at the sales stage and prior to contract signing stage. This is under sub-section 3. Anyone here comes to the same conclusion?

DOMESTIC BUILDING CONTRACTS ACT 1995 - SECT 37 Variation of plans or specifications—by builder
DOMESTIC BUILDING CONTRACTS ACT 1995 - SECT 37
Variation of plans or specifications—by builder
(1) A builder who wishes to vary the plans or specifications set out in a major domestic building contract must give the building owner a notice that—

(a) describes the variation the builder wishes to make; and

(b) states why the builder wishes to make the variation; and

(c) states what effect the variation will have on the work as a whole being carried out under the contract and whether a variation to any permit will be required; and

(d) if the variation will result in any delays, states the builder's reasonable estimate as to how long those delays will be; and

(e) states the cost of the variation and the effect it will have on the contract price.

(2) A builder must not give effect to any variation unless—

(a) the building owner gives the builder a signed consent to the variation attached to a copy of the notice required by subsection (1); or

(b) the following circumstances apply—

(i) a building surveyor or other authorised person under the Building Act 1993 requires in a building notice or building order under that Act that the variation be made; and

(ii) the requirement arose as a result of circumstances beyond the builder's control; and

(iii) the builder included a copy of the building notice or building order in the notice required by subsection (1); and

(iv) the building owner does not advise the builder in writing within 5 business days of receiving the notice required by subsection (1) that the building owner wishes to dispute the building notice or building order.

(3) A builder is not entitled to recover any money in respect of a variation unless—

(a) the builder—

(i) has complied with this section; and

(ii) can establish that the variation is made necessary by circumstances that could not have been reasonably foreseen by the builder at the time the contract was entered into; or

S. 37(3)(b) amended by No. 15/2016 s. 10(1).

(b) VCAT is satisfied—

(i) that there are exceptional circumstances or that the builder would suffer a significant or exceptional hardship by the operation of paragraph (a); and

(ii) that it would not be unfair to the building owner for the builder to recover the money.

(4) If subsection (3) applies, the builder is entitled to recover the cost of carrying out the variation plus a reasonable profit.

(5) This section does not apply to contractual terms dealing with prime cost items or provisional sums.