Q&A with Kristie Burt & Malvin Khaira
Q: How do I make a claim under Security of Payments?
A: The Building and Construction Industry (Security of Payment) Act 2009 is an adjudication process allowing timely payment to people who carry out construction work, or supply goods and services to the construction industry. As a general overview, the process involves the following steps:
- Claimant prepares and serves Payment Claim;
- Respondent is to serve a Payment Schedule within 10 business days (or shorter period if provided in the construction contract) of receiving the Payment Claim;
- Claimant is to accept or dispute the Payment Schedule; and
- Adjudication application is made depending on whether the respondent makes payment or disputes claim.
MBA ACT can provide general advice around Security of Payments but are unable to carry out the process for you. If you require assistance, you may contact our Member solicitors who will be able to assist.
Q: I heard that a Victorian Builder was prevented by the High Court from recovering around $600,000 in variation works carried out under a building contract. I am a residential builder in the ACT, what does this mean for me?
A: The Victorian Builder was prevented from recovering variations because they were not requested in accordance with the terms of the building contract or the Victorian Domestic Building Contracts Act 1995 (‘DBC Act’). The Builder had requested 42 variations orally instead of providing written notice as required by the contract and the DBC Act. The matter has now been referred back to the Victorian Tribunal (‘VCAT’) to determine whether in accordance with s38 (6-7) of the DBC Act, not being paid for the works would cause ‘significant or exceptional hardship’ on the builder.
In the ACT, the Building Act 2004 regulates residential building contracts. The Building Act does not require variation notices to be provided in writing, instead, the requirement to do so comes from most residential building contracts. These contracts require variations to be provided in writing and consented to by the homeowner. For instance, the MBA ACT Home Building Contract at clause 17 requires that a written variation notice be served on the homeowner as well as a cost variation notice. As a builder, you must comply with this or you run the risk of losing large contractual sums in the event of a dispute which could have been avoided if the contract had been administered properly in the first instance.
Q: What is the difference between the Maintenance Liability Period under a Residential Building Contract and the Statutory Warranties under the Building Act (ACT) and what does this mean for me as a builder?
A: Under the Master Builders ACT Home Building Contract, the Maintenance Liability Period is an opportunity for the homeowner to list any minor defects and/or minor omissions in the building. The Maintenance Liability Period starts after the date of Practical Completion and last for 90 calendar days (unless a different time period is prescribed in your building contract).
On the other hand, Statutory Warranties apply by law whether or not they are detailed in the building contract between the homeowner and yourself. These warranties require construction to be carried out:
- in compliance with the Building Act 2004 (ACT),
- in a proper manner and in accordance with the approved plans,
- using good and suitable materials,
- with reasonable diligence where no completion date is specified, and
- to ensure it will reasonably meet the requirements expressly made known by the owner
In the ACT, statutory warranties expire:
- for structural work, at the end of six years after the date of the completion of the work or no later than when the Certificate of Occupancy was issued, and
- for non-structural work, at the end of two years after the date of the completion of the work or no later than when the Certificate of Occupancy was issued.
What this means for you as a builder is that your liability towards the homeowner does not end after the expiration of the Maintenance Liability period, instead, it continues many years after the building works are completed. If you are experiencing any disputes around defects and will like to confirm your rights and obligations, please contact us at MBA ACT. You will find our contact details below.
Q: We have planned a Christmas/end-of-year party for all our workers. We are very excited about it, but will also like to know what our responsibilities are as employers towards workers at the function?
A: Workplace Health and Safety (WHS) obligations and behavioural standards continue to apply at work functions. You should ensure your workers are aware of this prior to the function.
Work functions often involve alcohol, however, the behaviour expectations of staff including senior staff remain the same and employees should be reminded of this. Employers and Senior staff should set a good example at the function, serve alcohol responsibly, provide food and non-alcoholic drinks, and set strict start and finish times. It is recommended that you review your workplace harassment, bullying and social media policies prior to the function and remind workers of what behaviour and conduct is acceptable and the consequences for failing to act appropriately.
It is also common for photos and comments to circulate on social media after or during a function and this may bring about complaints about some of the circulated content. You should therefore review and send out your social media policy before the function and ensure all staff are aware of what these policies are.
If you have any queries or would like to ask a question, please contact Malvin on 6175 5900.