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Posted 06 June 2017
Category: Strata, Renovations
Owners of apartments within strata schemes often want to add to or alter their lot property. This invariably involves entering into construction contracts with builders, architects, other contractors and consultants, as well dealing with the owners corporation. It is important that network of relationships is managed carefully and consistently. A key factor in this is a proper understanding of how contracts should be set up in each case.
Construction contracts are generally negotiated using one of the construction industry standard contracts as a template, such as the Master Builders Association (MBA) and the Housing Industry Association (HIA). Each of these has advantages and disadvantages, but all require some modification to deal properly with a range of legal and practical issues pertaining to strata schemes.
For example, Home owners entering into an MBA BC4 form of contract need to be aware of some of the potentially onerous conditions of that contract, and seek expert legal advice on the amendment of the standard form if they find those conditions unacceptable. Those kinds of conditions include:
In some cases owners may find such clauses acceptable, particularly if the contract price is attractive. But it would be a foolish owner who accepts such terms without giving serious thought into how the resultant risks are to be managed.
Context is everything, not just in terms of the circumstances of a particular project or owner’s requirements, but also the regulatory world of bylaws, council approvals, legislative changes, and developing case law. A layman cannot be expected to keep pace with changes in what is in any event a specialist form of contracting.
Unamended the HIA and MBA BC4 standard forms do not make provision for architect supervision, although the MBA do provide a supplement sheet that can be used where the owner wants to use a supervisory architect.
As the name implies, building contracts are part of the day to day business of a building contractor. A home owner may only enter into a building contract once in a lifetime. The contrast is stark, and where the stakes are high the owners shouldn’t suffer the disadvantage. For a miniscule percentage of the construction cost expert legal advice is available.
***The information contained in this article is general information only and not legal advice. The currency, accuracy and completeness of this article (and its contents) should be checked by obtaining independent legal advice before you take any action or otherwise rely upon its contents in any way.