Legal Aspects of Home Purchase
Normally a buyer first comes into contact with the property through a real-estate agent. Remember that the agent works for the seller, not for the buyer, and that the seller pays the agent’s fees or commission for negotiating the sale. This means that the agent’s obligations are primarily owed to the seller, not to the […]
Prime Costs and Provisional Sums
Prime Cost (PC) items and provisional sums (PS) are two items in a standard building contract which cause great confusion among homebuyers. Most building contracts are called “fixed price contracts”, but the final contract sum can vary due to fluctuations in PC and PS items. A PC item is an amount of money included in […]
Put and call options
Property transactions using “put and call options” have been common in the Eastern States and are used sparingly in WA. This arrangement can be useful to both a vendor and a purchaser in certain circumstances. Put and call options give the purchaser the right to enter a contract of sale for land within a specified […]
Liquidated Damages
A liquidated damages (LD) clause is common in many building contracts for commercial or institutional buildings, but less common in residential contracts. Liquidated damages are an amount which the builder agrees to pay to the homeowner for late completion of the project. This is usually an amount per day or per week. Liquidated damages are […]
Practical Completion
Practical completion is a term that is misunderstood by many home buyers. Generally it means the point where all building work is complete or all but completed, in accordance with the contract, and the house is reasonably fit for occupation. A building contract usually defines practical completion being when all works are completed, except for […]
Building Documentation
When applying for a building permit, the documents required need to be to a “ready for construction” standard. The minimum requirements for a building project when it comes to documenting can be summarised as: Drawings or Plans – These describe visually, what will be built, where the building is situated, the size of rooms and […]
Construction Times
While many contracts specify a definite time period in terms of “x” number of calendar or working days (which exclude weekends and public holidays), some contracts do not and this space is left blank. This does not mean that the builder has an infinite amount of time to complete the project. Courts have ruled on […]
Contract Variations
Variations to building contracts during construction are a common source of dispute between the parties. Many times clients visit site during the course of construction and request a different material or a structural change to the building plans. Such requests pose a dilemma for the builder because under the Home Building Contracts Act any variation […]
Contracts for Home Building Work
The Home Building Contracts Act 1991 (the HBC Act) provides protection for home owners and persons undertaking home building work. Part 2 of the HBC Act applies to fixed price contracts for ‘home building work’ valued between $7,500 and $500,000. Home building work includes: constructing a new dwelling; carrying out additions to an existing […]
Contracts for Building
A modest to large house could take about 12 months to build and involve 70 to 80 tradespersons. The slightest problem or variation can cause delays and cost increases. If we accept there are elements of risk in all building projects, the question is: who is to take on those risks? The basic premise of […]