Issue Date:  -  Thursday, 29 June 2006

Builders ordered to pay homeowners for building delays

The Building Disputes Tribunal has ordered two builders to pay nearly $14,000 in compensation to two homeowners for delaying the completion of their homes by up to nine months.

The Registrar of the Builders’ Registration Board of WA Nigel Lilley said the decisions highlighted the need for builders to be more realistic about building time frames.

The Building Disputes Tribunal ruled that the delays were not unforeseen by the builders and the homeowners were entitled to liquidated damages as set out in the contracts.

In the first case, BGC Residential Pty Ltd, trading as Now Homes, was ordered to pay an Orelia homeowner $6,216 after the practical completion date of her home was delayed by 255 days.

The amount included the extra costs the owner incurred to board her daughter in the area so the girl’s year 12 studies were not interrupted.

The Tribunal stated that the builder’s failure to comply with its contractual obligation to finish the building within the agreed time frame in the contract was “egregious”.

“Had the parties sat down at the time the contract was entered into and considered who should bear the additional costs associated with boarding the owner’s daughter if the contract was not completed within 12 months, the answer to that question would undoubtedly have been the builder,” it stated.

In the second case, BGC Constructions Pty Ltd was ordered to pay $7,772.35 to the owners of a Port Kennedy home after its practical completion was delayed by 209 days.

The Tribunal rejected a claim by the builder that it should only pay compensation for the number of “working days” delayed.

“If an owner is obliged to rent alternate accommodation as a result of a builder’s failure to complete the contract in the time required, the owner’s obligation to pay rent and/or interest payments on loans are not limited to “working days”,” it stated.

The compensation payout includes $3,937.35 in interest on the initial damages claim made by the homeowner.

“It is anticipated that the award of interest will encourage builders to pay claims for liquidated damages when the amounts for payment fall due rather than awaiting the outcome of the Tribunal determination,” the Tribunal stated.

Both matters have been submitted to the State Administrative Tribunal for a review of the Tribunal’s decision.

Mr Lilley said in the BGC Residential case, the Tribunal did accept some delays were out of the control of the builder including a roof tiler’s strike. However it rejected a number of other claims made by the builder.

“Builders cannot use the building boom as a carte blanche excuse to justify delays. They must provide evidence to the Tribunal that the delays were unforseen,” he said. “Builders must acknowledge that delays cause considerable disruption to homeowners and ensure that those delays are kept to a minimum.”

Mr Lilley said homeowners can take their contractual disputes to the Tribunal if the contract is valued between $6000 and $200,000. There is no restriction for homebuyers wanting to complain about workmanship issues. The Tribunal can be contacted on 9476 1222.

Media Contacts:

Builders’ Registration Board of WA
Registrar
Nigel Lilley
9476 1255
 
Gay McNamara
Journalist
CONSUMER PROTECTION
Dept. of Consumer and
Employment Protection
WESTERN AUSTRALIA

(08) 9282 0679
0413 032 584
(08) 9282 0727
www.docep.wa.gov.au