Domestic Building Contract Document D.B. Edition 3

Transcription

1 Domestic Building Contract Document D.B. Edition 3 AGREEMENT and CONDITIONS of BUILDING CONTRACT BETWEEN... (BUILDER) ACN and/or ABN No... AND... For use where an Architect is not employed to supervise the work and the work is over $20, Prepared by: MASTER BUILDERS ASSOCIATION OF TASMANIA INC (Use of this document does not imply that the Builder is necessarily a Member of the Association) Copyright January 2017

2 CONTENTS Clause Page CHECKLIST... 1 THE AGREEMENT AND PARTICULARS OF CONTRACT... 6 SCHEDULE SCHEDULE 2 SPECIAL CONDITIONS RESPONSIBILITY OF BUILDER AND STANDARDS OF CONSTRUCTION DISCREPANCIES AND AMBIGUITIES CONTRACT DOCUMENTATION AND COPYRIGHT COOLING OFF PERIOD OWNER S RESPONSIBILITIES PRIOR TO COMMENCEMENT OF WORK BUILDING APPROVAL LENDING AUTHORITY PROCEDURES POSSESSION OF THE SITE AND ACCESS QUALITY AND AVAILABILITY OF MATERIALS MATERIALS AFTER DEMOLITION DATE FOR COMMENCEMENT AND TIME FOR COMPLETION DELAYS AND EXTENSIONS OF TIME COMPLIANCE WITH THE REQUIREMENTS OF LOCAL AND OTHER AUTHORITIES SITE INVESTIGATION AND COST OF FOOTINGS VARIATIONS PRIME COST ITEMS AND/OR PROVISIONAL SUMS ASSIGNMENT AND SUBLETTING INSURANCE RESPONSIBILITIES OF BOTH PARTIES DEPOSIT PAYMENT SUSPENSION OF WORK PRACTICAL COMPLETION PAYMENT ON PRACTICAL COMPLETION DEFECTS LIABILITY PERIOD DETERMINATION BY THE OWNER DETERMINATION BY THE BUILDER DISPUTE RESOLUTION NOTICES DEFINITIONS AVOIDANCE OF REQUIREMENT OF ACT... 22

3 CHECKLIST (This checklist forms part of the contract for the purposes of Section 14 of the Residential Building Work Contracts and Dispute Resolution Act 2016 and is for the provision of information about the clauses in the contract only. Nothing in the checklist impacts on or modifies the Terms and Conditions of this Contract). 1. Two complete copies of all Contract Documents should be signed by the Owner/s and Builder and each party should retain a completed set of documents. 2. The Owner may withdraw from the Contract within 5 business days of signing or 7 days if no Residential Building Consumer Guide given. The details of your rights to withdraw are contained in the Residential Building Work Contracts and Dispute Resolution Act 2016 and in the Residential Building Consumer Guide. 3. The Particulars and the Schedules should be completed in full. Each page of the Specification should be initialled and the Specification dated and signed where indicated. Each sheet of the Drawings should be signed and dated with the notation: This is Sheet No...of...Drawings referred to in the Contract dated / / The Conditions should be initialled on each page by both parties and the Agreement should be signed on PAGE It is preferable that the Conditions not be amended or altered without legal advice. Any amendments, deletions or additions which are to be made to the wording of a Clause should be initialled by both parties in the margin of the relevant Clause. 6. Part 6 of the Residential Building Work Contracts and Dispute Resolution Act 2016 contains implied warranties in building work contracts on the part of the builder. 7. Where the Builder has actually incurred costs for preliminary out of pocket expenses relating to design work, connection of temporary services, consultancy fees, engineering input, council fees, earthworks or other similar matters the Builder may recoup those costs separately. These Preliminary costs can be legitimately claimed in addition to the deposit allowable under the Residential Building Work Contracts and Dispute Resolution Act Section 41 of the Residential Building Work Contracts and Dispute Resolution Act 2016 restricts the amount of deposit which can be charged for residential work at 10% of the contract price for building work between $20,000 and $50,000 and 5% of the contract price for building work valued at $50,000 or more. A person must not demand or receive any progress payment until it constitutes a genuine progress payment in respect of building work already performed. 9. Clause 27 DISPUTE RESOLUTION If a dispute or difference develops the parties should attempt to settle it by discussion or negotiation. If this fails then the parties should progress the matter in accordance with this Clause. Parties may also use the Disputes Resolution procedures as contained in the Residential Building Work Contracts and Dispute Resolution Act Schedule 1 4 METHOD OF PAYMENT This provides for four (4) methods of payment to the Builder. Three (3) of these methods should be deleted. PAYMENT OPTION A is used when it is practical for the parties, including the Lending Authority, to agree on staged payments. A i. On completion of the Base Stage, which means: a. in the case of a concrete slab floor the floor is completed; b. in the case of a timber floor the concrete footings are poured and the base brickwork is built to floor bearer level; c. in the case of a timber floor with no base brickwork the stumps, piers or columns are completed; d. in the case of a suspended concrete slab the concrete footings are poured and the base brickwork is built to lower floor level; e. in the case of the construction of the exterior walls and roof before the floor is constructed the concrete footings are poured and the base brickwork is built to lower floor level... percent of the contract price: (that is $...) ii. On completion of the Frame Stage, which means the stage when the frame is completed and approved by the Building Surveyor. percent of the contract price; (that is $ ) iii. On completion of the Lock up Stage, which means the stage when the external wall cladding and roof covering is fixed, the flooring laid and the doors and windows fixed. percent of the contract price; (that is $ ) 1

4 iv. On completion of the Fixing Stage, which means the stage when all the internal architraves, skirting, doors, built in shelves, baths, basins, troughs, sinks, cabinets and cupboards are fitted and fixed in position. percent of the contract price; (that is $ ) v. On Practical Completion of the works. percent of the contract price; (that is $ ) Appropriate stages generally are as follows: TYPE OF CONTRACT % OF CONTRACT PRICE STAGE A (i) (ii) (iii) Contract to build to lock up stage Contract to build to lock up stage Contract to build to lock up stage A (i) (ii) (iii) (iv) Contract to build to fixing stage Contract to build to fixing stage Contract to build to fixing stage Contract to build to fixing stage A (i) (ii) (iii) (iv) (v) Contract to construct through all stages Contract to construct through all stages Contract to construct through all stages Contract to construct through all stages Contract to construct through all stages 20% 25% 55% 12% 18% 40% 30% 10% 15% 35% 25% 15% Base stage Frame stage *Practical Completion Base stage Frame stage Lock up stage *Practical Completion Base stage Frame stage Lock up stage Fixing stage *Practical Completion NOTE PERCENTAGES SHOULD TOTAL 100% (INCLUDING DEPOSIT PERCENTAGE) *NOTE: The deposit is brought into account on Practical Completion Clause 19(b). However in some cases these percentages will not be appropriate. Examples are: When more than five payments are to be made because of the time or cost of the project; When the site is steep and/or rocky and therefore the costs of footings are higher than normal; When some of the work e.g. painting, tiling, is not included in the Builder s Contract. Avoid using the terms such as lockup, frame stage, fixing etc., unless such terms are clearly and fully defined. Payment should be made to the Builder once the agreed stage has been reached despite the fact there may be some minor items which require attention or rectification. It is normal building practice for these to be remedied as the work progresses. *Special Note Practical Completion under this Contract may not be deemed to be practically complete for the purpose of the Residential Building Work Contracts and Dispute Resolution Act 2016, especially if there are Works which are to be done by the Owner. 11. Clause 8 (b) POSSESSION OF THE SITE AND ACCESS a. For a number of reasons, including safety, theft and damage to finished work, people, other than workmen, cannot be allowed unrestricted access to buildings under construction. This contract restricts the Owner to reasonable access during ordinary business hours. The only others who have similar access are duly authorised officers of the lending authority. b. Relatives and friends particularly children should be discouraged from inspecting the building at any time it is under construction. They could cause injury to themselves, or damage to the building, which would result in an extension of the completion time, and possibly a claim by the Builder for additional costs. (See Clause 12) 12. Clause 12 DELAYS AND EXTENSIONS OF TIME (a) (iii) Inclement Weather 2

5 a. For clarification INCLEMENT WEATHER means the existence of rain or abnormal climatic conditions (whether they be those of hail, floods, snow, cold, high winds, severe dust storms, extreme high temperatures or the like or any combination thereof), by virtue of which it is either not reasonable or not safe for employees exposed thereto to continue working while the conditions prevail. 3

6 13. Clause 14 (c) & (d) SITE INVESTIGATION AND COST OF FOOTINGS Should the Builder encounter rock or other items below the ground which are not evident through normal investigations and which necessitate additional excavations or the site will not be reasonably capable of supporting the Works, then the Builder will give prompt notice to the Owner. In certain circumstances it may not be practical to contact the Owner due to the site location or the unavailability of the Owner, therefore to avoid stopping the progress of the Works and incurring additional costs of plant and equipment hire or other costs and charges associated therewith a contingency amount has been provided under Item 10 of Schedule 1. This amount provides for the Builder to quickly assess the additional costs likely to be incurred and to proceed with the Works within the limit of the contingency amount. The Builder shall not proceed with the Works should the cost of additional work exceed the contingency amount provided under Item 10 of Schedule 1 without the consent of the Owner and Lending Authority (if any) as provided under this Clause. 14. LEGISLATION 14 A Building and Construction Industry Security of Payment Act 2009 In 2009 the Building and Construction Industry Security of Payment Act came into force in Tasmania. Under that Act a Builder may commence proceedings on unpaid progress payments or final invoices that are overdue provided the invoice has been endorsed as a payment claim made under the Act. Strict time requirements apply regarding the issuing of responses and other documentation under the legislation. Owners are encouraged to inform themselves of the requirements of this legislation which is administered by Department of Justice. Full details are available from the Department of Justice website. 14 B Building Act 2016 The Building Act 2016 deals with a range of matters covering residential building including the right to complain of a building defect. 14 C Residential Work Contracts and Dispute Resolution Act The Residential Building Work Contracts and Dispute Resolution Act 2016 deals with mandatory contractual terms, statutory and implied warranties and provides for an optional government controlled dispute resolution process. 15. FINANCE Evidence of Funds Availability Documented evidence of funds availability must be provided, in the form of a bank/mortgage document. WHAT THE OWNER MUST DO Before work can commence the Owner must produce evidence of the availability of funds and the ability to pay the contract sum (this can be in the form of a letter from your lending authority) and title to the land on which the Works are to be constructed. You could obtain this when getting particulars of inspection and payment procedures of the lending authority prior to the signing of the contract (Clause 4). Pay the actual costs, if any and deposit, (refer CHECKLIST 8 & Item 4 of Schedule 1 and Clause 19). Insure existing structures and contents if applicable, (refer Clause 18 (h)). Owners should be aware that the Insurance of the Works and the contents become their responsibility should they occupy the property prior to completion, refer (Clause 18 (g)) and immediately on receipt of notice of practical completion from the Builder, refer (Clause 22). Irrevocably authorise the lending authority to pay all monies which become due to the Builder. (Clause 7). Provide prompt instructions to the Builder in relation to PC selections and variation requests. (Clauses 15 & 16). Remember an agreed amount has been estimated for Owners selections and placed in the contract as a Prime Cost or Provisional Sum. If the Owner selects items in excess of the PC amount then the difference together with an amount for the Builder s margin will be added to the contract sum. Make prompt payment on all progress and final payment claims. (Clause 20 & 23). Provide prompt answers to the Builder s request for clarification of discrepancies and ambiguities in the Contract documents. (Clause 2). 4

7 Provide the Builder with a list of defects (if any) before expiration of the Defects Liability Period. (Clause 24) 5

8 WHAT THE BUILDER MUST DO Pay Statutory Fees and Levies Insure the Works and arrange cover for Workers Compensation and Public Liability. (Clause 18) Comply with the requirements of Local and other authorities. (Clause 13) Facilitate inspection of the Works by the Lending Authority. (Clause 7) Proceed diligently with the Works to acceptable industry standards in a competent manner and bring to practical completion within the construction period Promptly provide the Owner with written particulars of claims for variations, progress or final payment claims, delay costs, extension of time, or adjustments to the contract sum. (Clauses 12, 15, 16, 20, 22) Promptly seek instructions from the Owner in regard to substitute materials. (Clause 9) Subject to (Clause 10) remove all demolished materials from the site Give you a copy of the signed Contract Give you a copy of the Residential Building Consumer Guide Comply with the Building Act 2016 and the Residential Building Work Contracts and Dispute Resolution Act 2016 SOME THINGS TO REMEMBER The Owner is not entitled to the keys until all the monies have been paid but the Builder must remedy any defective work after the Owner has possession. Under the Residential Building Work Contracts and Dispute Resolution Act 2016 the Builder must guarantee their work is fit for purpose, performed diligently and delivered in a reasonable time. The Act contains a range of other warranties that form part of the contract. See the Residential Building Consumer Guide for further information. ABOUT THE CONTRACT The DB3 Agreement and Conditions of Building Contract is designed only for use in residential building, renovation and construction. It is not intended for use where an Architect is supervising the construction of the Works. The Contract seeks an equitable balance between the rights and obligations of the Builder and Owner and where possible non legal terminology and the use of easy to understand schedules are used. This contract is primarily for use for residential buildings works over $20, Parties should use the MBT Minor Works contract for works under $20, USE OF SCHEDULES Schedule 1 When you open the document you will see a lot of blank items to be filled in. The Contract is set out this way to make the Owner and Builder consider and decide the exact terms of the agreement. You cannot leave these items blank as they are designed to form the base of the agreement and to reduce any problems or disputes which may arise during the course of construction, or eliminate delays. FILLING IN THE GAPS The Owner and the Builder must agree on several important matters which may cause the Contract sum to alter, namely: Item 1: The amount of Builder s overhead and profit (expressed as a %) to be added to the Builder s costs of doing extra work or changing the work. Item 2: The amount of Builder s overhead and profit to be added where the amount of expenditure allowed for Prime Cost or Provisional Sums are exceeded. The amount of the excess is also added to the Contract sum on Page 9. Item 3: The amount to be added or deducted from the Contract sum if the Owner or the Builder causes delay. Item 4: Method of Payment A detailed explanation of this is provided under CHECKLIST 10 at the commencement of this document. 6

9 Item 5: Provides the number of actual working days from the date of commencement (this is subject to Clauses 5, 11 & 12) for the construction period. Notes: Remember that the Works will not commence on the date specified if the Owner has not given the Builder written evidence of title to the land and the availability of funds and the ability to pay the Contract sum. Item 6: Provides the number of days in which a progress claim must be paid. There should be enough time for the lending authority to process the progress claim, usually 5 to 10 days. Item 7: Requires the interest rate to be inserted in respect of overdue payments. Information on acceptable current commercial rates are available from banks and lending authorities. Item 8: The Owner and the Builder decide who will own and remove any demolished materials usually relevant in home extensions. Parties must carefully consider the worth of any second hand materials and the cost of removing them from the premises. Item 9: The Owner must provide the Builder with a written list prior to the expiration of the period stated (or, if not stated, 13 weeks) of defects or faults which are to be made good by the Builder. At the completion of all items the Builder and Owner should sign acknowledgment that the work has been satisfactorily completed. Item 10: An explanation in respect to Footings is contained under CHECKLIST 13 at the commencement of the Contract document. 7

10 THE AGREEMENT AND PARTICULARS OF CONTRACT OWNER(S) Address: Owner's Address: BUILDER: Address: Builder's Address: ACN and/or ABN Number: Accreditation/Licence Number: MBT Membership Number: SITE ADDRESS: Municipality: Lot Number: Volume: Folio: THE WORKS (If additional space is required please attach additional details) BUILDER'S WORK General Description (eg Construction of Dwelling, Extension) OWNER'S WORK (if any, including materials to be supplied by the Building Owner) EXCLUDED WORK (List any works indicated on drawings and/or project specifications which are not included in this contract) 8

11 THE CONTRACT DOCUMENTS Special Conditions: (if applicable) Arranged By Building Owner Builder Description: Specifications: Arranged By Building Owner Builder Description: Architectural Drawings: Arranged By Building Owner Builder Description: Engineering Drawings: (including footings) Arranged By Building Owner Builder Description: Quotation/Letter of Offer: Arranged By Building Owner Builder Description: Other: Arranged By Building Owner Builder Description: Approval: Arranged By Building Owner Builder Approved By Building Surveyor Council Approval Number(s) NOTE: Builder cannot be held liable for any deficiencies or issues relating to design or documentation. The Builder cannot alter design or drawings without prior approval from designer/architect, engineer, or building surveyor; additional costs for which will be the responsibility of the client. SOURCE OF OWNER FINANCE (see CHECKLIST 15): To be advanced on mortgage $ (amount) by (lending authority) Funded by Owner $ (amount) 9

12 IT IS AGREED: 1. The Builder shall subject to the Conditions of Contract, for the consideration mentioned, complete the work shown upon the Drawings and described in the Specifications. 2. The Owner shall pay to the Builder the sum of $ (incl GST) The Amount in words.. (incl.gst)... "the Contract Sum" or such other sum as shall become payable under this Agreement at the times and in the manner specified in these Conditions. 10

13 The parties have signed Date signed: SIGNED by the BUILDER: In the presence of: Witness Name & Address (PRINT) SIGNED by the OWNER/S: In the presence of: Witness Name & Address (PRINT) 11

14 By signing this agreement the owner/s acknowledge that they have been given a copy of the Residential Building Consumer Guide as required under Section 39 of the Residential Building Work Contracts and Dispute Resolution Act SCHEDULE 1 1. Percentage to be allowed for supervision, overhead and profit on variations Clause Percentage to be added to the excess where expenditure is greater than the amount allowed for prime cost or provisional sums Clause 16(c) % % 3. Reimbursement of costs for delays a. payable by Builder Clause 11 (c) per calendar day incl. GST b. payable by Owner Clause 12 (e) per calendar day $ incl. GST 4. METHOD OF PAYMENT ACTUAL COSTS Clause 19 The Builder is entitled to recoup legitimate expenses incurred up to the point of signing the Contract (see CHECKLIST 7) incl. GST *Note: If not known at time of signing this contract, amount equal to receipted actual costs when available. DEPOSIT Clause 18 A deposit of the Contract Sum is applicable (see CHECKLIST 8) Deposit Amount $ percentage incl. GST PAYMENT shall be made in all cases in accordance with Clauses 20 or 23 as is applicable Method of Payment options A Progress Payments/Work Value Payments B Other C Deposit and Progress Payments for Multiple Dwelling Construction (units) A Progress Payments shall be made at the following stages of the Works: Work includes materials delivered to the site for use in the Works. (see CHECKLIST 10) STAGE % $ Deposit % $ % $ % $ % $ % % $ $ Practical Completion (Note: less percentage taken as the Deposit if applicable) % $ TOTAL CONTRACT PRICE 100% $ 12

15 A Work Value Payments shall be made for the value of the work performed at the date of the request for payment. Requests for payment shall not be made more frequently than every 2 weeks. This option is available even when the above progress payments table has been completed. When a Work Value Payment is requested by the builder under this option the amount of the next progress payment set out in the table (if any) to be due will be decreased by the same amount as the Work Value Payment request. B Other as agreed by parties: Explanation: C Deposit And Progress Payments for Multiple Dwelling Construction (units) Where this agreement is made for the purpose of constructing two or more single dwelling units: i. Deposit The maximum deposit shall be 5% of the contract value to construct the given number of dwelling units. ii. Progress payments The method for payment and payment stages as defined and selected at item 4 A, B or C shall apply separately to each dwelling unit. 5. CONSTRUCTION PERIOD Subject to Clauses 5, 11, 12 as applicable: CHOOSE EITHER METHOD: Method A Method B Method A Start Date: This date may be adjusted if the Owner delays in fulfilling the Owner's Responsibilities in accordance with Clause 5. Completion Date: This date may change, subject to adjustments as provided for by this contract and for any approved claims for extension of time in accordance with Clause 12. OR Method B Start Date: The period of Working Days from the date the Owners Responsibilities are satisfied in accordance with Clause 5. Completion Date: The period of Working Days from the Start Date as noted in Clause 11a. This date may change, subject to adjustments as provided for by this contract and for any approved claims for extension of time in accordance with Clause 12. Working Days Working Days 6. PERIOD AFTER REQUEST FOR PAYMENT OF PROGRESS CLAIMS Clause 20 (c): Days (if nothing stated then 10 business days) 13

16 7. ANNUAL INTEREST RATE FOR OVERDUE PAYMENTS Clauses 20 (e) and 23 (c): % (if nothing stated then 12% calculated weekly) 8. DEMOLITION MATERIALS (if nothing stated then option (a)) Clause 10: The Owner: Select Demolish material option: (a) Does not wish to retain or otherwise control any demolished material (b) Wishes to retain only those items of demolished materials which are itemised at SCHEDULE 2 SPECIAL CONDITIONS OF CONTRACT 9. DEFECTS LIABILITY PERIOD Clause 24: weeks 10. FOOTINGS Clause 14: Contingency amount of increased payment without prior consent of $ Owner and Lending Authority (if any) incl. GST 11. PRIME COST AND PROVISIONAL SUM ITEMS NOTE: Alternatively Prime Cost and Provisional Sums may be listed by way of an attached schedule or if applicable in the Builder's quotation/letter of offer. List each item and the $ value allowed, separately PRIME COSTS Description Specify the item, brand, model, colour, finish, style etc $ Value (inclusive GST) $ $ $ TOTAL $ 14

17 11.2 PROVISIONAL SUMS Description Specify the item, brand, model, colour, style, etc) $ Value (inclusive GST) $ $ $ TOTAL $ 15

18 SCHEDULE 2 SPECIAL CONDITIONS Please set out Special Conditions below: N.B. Should no Special Conditions be required, a line should be drawn diagonally through this space and initialled by each party. 16

19 1. RESPONSIBILITY OF BUILDER AND STANDARDS OF CONSTRUCTION a. The Builder shall in a proper and skilled manner and subject to these Conditions execute and complete the Works shown on the Contract Drawings and described in the Specification. b. The Builder must comply with the statutory warranties as contained in Part 6 of the Residential Building Work Contracts and Dispute Resolution Act 2016 namely: i. The Builder warrants that all materials to be supplied for use in the residential building work will be good, having regard to the relevant criteria, suitable for the purpose for which they are used and unless otherwise stated new. ii. The Builder warrants the residential building work to be performed will be performed in accordance with all relevant laws and legal requirements. iii. The Builder warrants the residential building work will be performed in an appropriate and skilful way and with reasonable care and skill. iv. The Builder warrants the residential building work will be performed in accordance with the plans and specifications. v. The Builder warrants the residential building work performed will be suitable for occupation when the residential building work is completed. vi. The Builder warrants that the residential building work will be performed with reasonable diligence. vii. The Builder warrants that Provisional Sums and Prime Costs have been calculated with reasonable care and skill as required by the Residential Building Work Contracts and Dispute Resolution Act DISCREPANCIES AND AMBIGUITIES a. Should there be any discrepancy or ambiguity in the Contract documents the following order of precedence shall be employed to resolve the same: i. The Agreement and these Conditions including any Special Conditions; ii. The Specification; iii. Drawings to a larger scale; iv. Other Drawings. b. The Builder shall notify the Owner in writing of any discrepancy or ambiguity and request instructions on how to proceed. c. Should the Owner fail to give adequate instructions within five (5) days of receiving notice under Sub Clause (b), then the Builder may proceed with the work on the basis of the interpretation in accordance with Sub Clause (a). d. Should any instruction of the Owner require an interpretation to be adopted, other than that in Sub Clause (a), then the Builder shall be entitled to a variation under Clause 15. e. Notwithstanding this Clause, in case of any difference between scaled dimensions and figures on the Drawings, the figures shall prevail. 3. CONTRACT DOCUMENTATION AND COPYRIGHT a. The party which provides the Drawings and/or Specification, warrants their accuracy and correctness. b. Where the Builder does not prepare the Drawings, or prepares the Drawings under the instruction, direction or supervision of the Owner or from sketches supplied by the Owner, then the Owner indemnifies the Builder against all actions, proceedings and claims for or in respect of any breach of copyright by the Builder. c. Apart from any terms implied by Statute, the whole of the terms, conditions and warranties of this Agreement are set out in the Contract, Drawings and Specification and shall not be in any way varied or affected by reference to any prior negotiations, stipulations or agreement, whether written or verbal. 4. COOLING OFF PERIOD The Owner has the legislative right to withdraw from the contract as set out in Part 7 of the Residential Building Work Contracts and Dispute Resolution Act OWNER S RESPONSIBILITIES PRIOR TO COMMENCEMENT OF WORK a. Prior to the commencement of the Works, the Owner shall produce to the Builder: i. documentary evidence of the Owner s title to the land on which the Works are to be executed; and ii. documentary evidence of the availability of funds and the ability to pay the Contract Sum to the Builder at the times and in the manner specified. b. The Owner shall be responsible for the boundaries of the site upon which the Works are to be performed to be accurately and clearly set out by means of survey pegs. The Builder shall be responsible for the care and maintenance of such pegs during the period of the Contract. c. Should the Owner fail to produce the evidence required by this Clause within ten (10) days of the execution of this Contract, the Builder may determine the Contract in accordance with Clause

20 6. BUILDING APPROVAL The Builder shall apply for Building Approval within fourteen (14) days of the Execution of this Agreement. Should Building Approval not be issued within thirty (30) days after the application, where a separate Planning Application is not required, then either party may by giving notice to the other, terminate this Agreement without liability to the other except that the Builder shall be entitled to a reasonable sum for services performed and expenses incurred to the date of termination. Where a Planning Application is required, the thirty (30) day period commences after the relevant Planning Approval has been granted. If a Building Permit does not exist at the time of signing this Contract, the Builder shall make application to the relevant Permit Authority. 7. LENDING AUTHORITY PROCEDURES In respect only of that part of the Contract Sum for which finance is being provided to the Owner by a Lending Authority the following provisions shall apply: a. The Owner shall, prior to the commencement of the Works, irrevocably authorise and direct the Lending Authority to pay to the Builder all monies which may become due to the Builder. b. The Owner shall furnish to the Builder, written notice of the various stages at which inspection of the Works will be required by the Lending Authority and the Builder shall notify the Lending Authority when such stages have been reached. c. Where check or progress surveys are required by the Lending Authority, the Builder shall promptly inform the Owner when the Works reach the required stage and the Owner shall be responsible for having the survey carried out within a reasonable time. d. The Builder shall take such reasonable steps as may be required on its part to facilitate inspection of the Works on behalf of the Lending Authority in accordance with its regulations and procedures. e. The Builder may also require that, prior to the execution of any variation, the Owner shall produce written consent of the Lending Authority to the variation. f. The Owner is responsible for payment of all payment requests the Builder is entitled to make under this Contract. Failure or delay in the Lending Authority making funds available is not a valid reason for the Owner to not pay a payment request when due under the Contract. 8. POSSESSION OF THE SITE AND ACCESS a. The Builder shall have exclusive and uninterrupted possession of and access to the Site for the performance of this Contract except, unless requested by the Builder, for the rectification of defects where the Owner will ensure unfettered access to the property. b. The Owner or their duly appointed representative or an authorised officer of the Lending Authority shall have access to the land for the purpose of inspecting and viewing the progress of the Works but only at reasonable times and in such a manner as shall not disrupt the Builder or prevent the Builder from properly discharging their contractual obligations. c. Neither the Owner nor any duly appointed representative shall give or be entitled to give at any time directions to the Builder s workers or subcontractors on the Site, or elsewhere, relating to the Works or any part thereof. All instructions shall be given directly to the Builder. 9. QUALITY AND AVAILABILITY OF MATERIALS a. The Builder will comply with the obligations as set out in the Building Act 2016 and Residential Building Work Contracts and Dispute Resolution Act 2016 regarding the materials used. b. If any material specified to be used in the Works is not readily obtainable, the Builder will seek instruction in regard to substitutes to be used and any difference in price shall be deemed to be a variation pursuant to Clause MATERIALS AFTER DEMOLITION All demolished materials other than those specified in Item 8 (b) of Schedule 1 will become the property of the Builder and shall be removed from the site by the Builder prior to completion. 11. DATE FOR COMMENCEMENT AND TIME FOR COMPLETION a. The Builder shall commence the Works: i. within fifteen (15) days after the Owner s compliance with Clause 5; or ii. within fifteen (15) days after receipt of the Building Approval, whichever shall be the later. b. The Builder shall bring the Works to Practical Completion within the Construction Period stated in Item 5 of Schedule 1, subject, however, to any extension of time under Clause 12. c. If the Builder fails to bring the Works to Practical Completion by the Date for Practical Completion calculated in accordance with Item 5 of Schedule 1, extended as provided for in Clause 12, the Builder shall pay or allow to the Owner by way of pre 18

21 estimated and liquidated damages, a sum calculated at the rate stated in Item 3 of Schedule 1 for the period from Date for Practical Completion until Practical Completion as determined in accordance with Clause 22. d. The amount of any such damages may be deducted from any monies which may become payable to the Builder by the Owner and any deficiency may be recovered by the Owner as a debt due to the Owner by the Builder. e. If no date/s for commencement and/or completion has been included then the commencement date will be the 15th day after the Building Approval has been received by the Builder. The completion date will be the 5th day after the Occupancy Permit has been received by the Builder. f. Subclause e. will not apply where a date may be specifically calculated under the Residential Building Work Contracts and Dispute Resolution Act DELAYS AND EXTENSIONS OF TIME a. Should the progress of the Works be delayed by any of the following causes or conditions resulting from them: i. variations; ii. suspension of the Works under Clause 21; iii inclement weather; iv. proceedings being taken or threatened by, or disputes with adjoining or neighbouring owners or residents; v. civil commotion or industrial dispute affecting any of the trades employed upon the Works or the manufacture or supply of materials for the Works; vi. any act, default or omission on the part of the Owner; vii. delay by any local or other authority in granting any necessary consent or approval; viii. any other matter, cause or thing beyond the control of the Builder, then, in any such case, the Builder shall be entitled to a fair and reasonable extension of the Construction Period. b. The Builder shall notify the Owner in writing of any delays within a reasonable time of their occurrence, together with a stated time for extension of the Construction Period. c. Should the Owner not dissent in writing within five (5) days from the notification, the Construction Period shall be deemed to be extended by the period claimed in the notification under Sub Clause (b). d. It shall be a condition precedent to any extension of time under this Clause that the Builder shall use their best endeavours to minimise any delay. e. If the delay results from any of the matters in paragraphs (i), (ii), or (vi) of Sub Clause (a), the Contract Sum shall be adjusted by the addition of an amount calculated in accordance with the rate for delay costs in Item 3 (b) of Schedule 1. Failure by the Builder to provide notification as required in Sub Clause 12(b) does not prevent the Builder relying upon any event that may fall within Clause 12 in defence to any claim pursuant to Sub Clause 12(e) where the Owner was aware of that event or the Owner should have been reasonably aware in the circumstances. 13. COMPLIANCE WITH THE REQUIREMENTS OF LOCAL AND OTHER AUTHORITIES a. The Builder shall comply with and give all notices required by any Act of Parliament or by any regulation or by law of any local authority or of any public service company or authority which has any jurisdiction with regard to the Works or with whose systems are the same are or will be connected, and they shall pay and indemnify the Owner against any fees or charges legally demandable under the Act of Parliament, regulation or by law in respect of the Works provided that the Builder shall not be responsible for any legally demandable fees or charges that are imposed after the date of this Contract. b. The Builder, before making any variation from the Contract Drawings or Specification necessary for compliance with Sub Clause (a), shall give to the Owner written notice specifying and giving reason for the variation and applying for instructions. c. If the Builder within five (5) days of having applied for the instruction referred to in Sub clause (b) does not receive those instructions, they shall proceed with the work conforming to the provision, regulation or by law in question and any variation thereby necessitated shall be deemed to be a variation under Clause 15. d. i. The Builder shall not be required to provide the written notice pursuant to Sub Clause (b) whenever the work to be carried out is, in the opinion of the Builder, urgently necessary in order to prevent loss of or damage to the Works or to any property or to prevent personal injury to or the death of any person. ii. The Builder shall give to the Owner written notice (as soon as practicable after the work has been commenced) specifying the reasons for not giving the notice in writing required by Sub Clause (b) and also giving the reason for the variation. e. If compliance with the requirements of this Clause shall involve the Builder in loss or expense beyond that provided for in this Contract, the amount of that loss or expense shall be added to the Contract Sum. 14. SITE INVESTIGATION AND COST OF FOOTINGS a. The Builder shall be deemed to have allowed for the design of the footings shown in the contract documents as drawn up by the party named under the Contract Documents Engineering Drawings (Page 8). b. Should the Site not be reasonably capable of supporting the Works then this Contract may be terminated without liability on either side except that the Builder shall be entitled to be paid the actual cost of work up to the date when it was ascertained that the Site would not support the Works. 19

22 c. Should the Drawings or the Specification indicate the nature of the ground below the surface thereof and/or the depth to which excavations will have to be made to provide footings or services then any extra work caused by conditions being other than indicated in the Drawings or Specification or caused by the necessity to excavate to a greater extent than so indicated shall be deemed to be a variation provided for in Clause 15. d. The Builder agrees that they will promptly give notice to the Owner and to the Lending Authority (if any) should it appear to them that the Site will not be reasonably capable of supporting the Works, or that the Owner will become liable for any increased payment in excess of the contingency amount under Item 10 of Schedule 1 arising from any of the matters mentioned in this Clause. The Builder will not proceed further with the Works at increased cost (in excess of the contingency amount under Item 10 of Schedule 1 to the Owner without the consent of the Lending Authority (if any). 15. VARIATIONS a. This Contract may be varied by: i. increases or decreases in or omissions from the Works; ii. execution of additional work; iii. changes in the character or quality of any material or work; iv. changes in the levels, lines, positions or dimensions of any part of the Works b. The Builder shall not be obliged to vary the Contract or carry out any extra work unless they consent, which shall not be unreasonably withheld. c. i. If the Builder agrees to undertake the variation, the variation shall be in writing and signed by the Builder and the Owner personally or by an agent authorised to act on behalf of the Builder or the Owner. ii. The Builder may require that, prior to the execution of any variation, the owner shall produce evidence satisfactory to the Builder of the availability of funds and the ability to pay the proper value of the variation. d. The Builder shall within a reasonable time of receipt of written instructions to execute a variation, notify the Owner in writing of the value of the variation, or of the Builder s refusal to comply with the instruction. e. The cost of all omissions from the Works less the allowance specified in Item 1 of Schedule 1 for supervision, overhead and profit, shall be deducted from the Contract Sum. f. The cost of all extra work shall be added to the Contract Sum and where a price in respect of any variation shall have previously been agreed, that sum shall be added to the next progress payment due after the execution of the work. g. Where a price shall not have been previously agreed, the Builder may proceed with the variation work and the price to be paid for the work shall be the cost together with the allowance specified in Item 1 of Schedule 1 for supervision, overhead and profit. h. In calculating the cost of extra work: i. Where the Builder executes the work, the rates for labour shall be as agreed but if rates cannot be agreed then the rates shall be the rates published by the Master Builders Association of Tasmania Inc. current at the time the variation is made; and ii. The price for materials shall be the GST exclusive cost of materials to the Builder; the Builder shall not be entitled to any discount other than a discount for prompt or cash payment nor to charge GST on GST; or iii. Where the work is executed by a subcontractor, the amount properly paid or payable to the subcontractor. i. Failure by the parties to adhere to the notification requirements as set out in Clause 15 does not prevent the Builder from claiming for work done as a variation where the Owner is aware that the work was being done. j. The Builder should comply with the requirements of the Residential Building Work Contracts and Dispute Resolution Act 2016 in relation to variations. k. The Owner acknowledges that the Builder is entitled to payment for work done and that the Builder is entitled to make a quantum meruit claim for building work done that is not within the Plans and Specifications of this Contract but requested or known to be done by the Owner. 16. PRIME COST ITEMS AND/OR PROVISIONAL SUMS a. i. Where Prime Cost items are included in the contract, a specific value and description for each item must be listed at Schedule 1 Item 11.1 OR by way of an appended Prime Cost Schedule ii. Where Provisional Sums allowances are included in the contract, a specific value and description for each allowance must be listed at Schedule 1 Item 11.2 OR by way of an appended Provisional Sum Schedule. A brief summary of the work or scope of work must be included for all allowances listed at 11.2 or by way of an appended Provisional Sum Schedule. b. Where Prime Costs or Provisional Sums are included in the Contract, the Owner shall furnish to the Builder all the necessary directions regarding the selection and supply of the Work and/or goods represented by such sums in sufficient time to ensure that no delay is occasioned in the progress of the Works always provided that the Builder shall make any request for information about such sums in reasonable time. c. Any part of such sums not expended, shall be deducted from the Contract Sum. d. In the event that the total amount expended in respect of such sums exceeds the amount included in the Contract Sum, the excess amount, together with the percentage on the excess specified in Items 1 and 2 of Schedule 1, shall be added to the Contract Sum. e. Normal trade discounts shall be allowed in favour of the Owner; any cash discounts or discounts for prompt payment shall be allowed in favour of the Builder. 20

23 f. Until Practical Completion the Builder shall be responsible for any damage to or any loss of any goods supplied and which are on Site prior to their being fixed in position, including goods specifically purchased by the Owner for installation by the Builder. g. With the exception of cartage, all such items as fixing and profit relative to any Prime Cost Sums shall be considered to have been allowed for by the Builder and shall not be part of the expenditure on such items unless specifically stated otherwise elsewhere in the Contract Documents. h. The Builder warrants and the Owner acknowledges that the Builder has calculated the Provisional Sums and Prime Cost Items in accordance with Section 30 of the Residential Building Work Contracts and Dispute Resolution Act i. The Owner acknowledges that it has examined the Prime Costs and Provision Sums allowed for in this Agreement and is satisfied with the amounts allowed for such items and sums and that such amounts are reasonable in relation to the building works being performed in relation to this Agreement. 17. ASSIGNMENT AND SUBLETTING a. Neither party to this Contract shall assign the Contract without the written consent of the other which consent shall not be unreasonably withheld. b. The Builder may subcontract any portion of the Works, but any subcontracting shall not relieve the Builder from any of their liabilities or obligations under this Contract. 18. INSURANCE RESPONSIBILITIES OF BOTH PARTIES a. Workers Compensation: The Builder shall insure against any legal liability, loss, claim or proceedings whatsoever, whether arising at common law or by virtue of any statute relating to Workers Compensation or Employers Liability, by any person employed by him and shall ensure that every subcontractor shall likewise insure against any such liability with respect to the subcontractor s employees. b. Injury to Persons: The Builder shall be solely liable for and shall indemnify the Owner in respect of and shall insure against any legal liability, loss, claim or proceedings whatsoever arising under any Statute [other than as provided in Sub Clause (a)] or at common law in respect of personal injury to or death to any person arising out of or in the course of the Works unless due to any act or neglect of the Owner or of any other person for whom the Owner is responsible. c. Damage to Property: i. The Builder shall be liable for and shall indemnify the Owner and shall insure against any legal liability, loss, claim or proceedings in respect of any injury or damage whatsoever to any property, real or personal, insofar as the injury or damage arises out of or in the course of or by reason of the execution of the Works. The Builder shall only be liable if the injury or damage is due to any negligence, omission or default of the Builder, his servants or agents or any subcontractor. ii. With regard to loss or damage by fire, explosion, lightning and civil commotion this Sub Clause is to be read subject to the provisions of Sub Clause 18(e). d. The Works: i. The Builder in joint names of the Owner and himself and any lending authority (all of whom are referred to in this Clause as the insured) for their respective rights and interests shall have an effect Contract Works Insurance for at least the full reinstatement value of the Works including all unfixed materials stored upon the site. ii. The policy of insurance shall provide that insofar as the policy may cover more than one insured all insuring agreements and endorsements with the exception of limits of liability shall operate in the same manner as if there were a separate policy of insurance covering each party comprising the Insured. The policy further shall provide that the Insurer waives all rights remedies or relief of which it might become entitled by subrogation against any of the parties comprising the Insured. e. The Builder shall, upon settlement of any claim under these policies, proceed with due diligence to rebuild or repair the Works and replace or repair the materials destroyed or damaged. Any amount so payable in respect of the settlement for work and materials for which the Builder has previously been paid shall forthwith be paid into a Bank mutually agreed upon by the parties in an account in the joint names of the Owner and the Builder, and the proportion of the moneys payable to the Builder shall be paid out of the account by instalments as with normal progress payments, and the Builder shall not be entitled to any payment in respect of the rebuilding or repair of the Works or the replacement or repair of the materials destroyed or damaged other than the moneys received under the policies together with the bank interest that accrues from the joint account. The Builder shall be entitled to immediately receive from any settlement the amount of money paid for work and materials for which previous payment had not been received. f. Period and Currency of Insurance: The insurances referred to in this Clause shall be effected before the Works are commenced and shall be maintained effective in respect of the Works until Practical completion or occupation or use of the Works or any portion by the Owner and in respect of Public liability and of Workers Compensation until the end of the Defects Liability Period. The Builder shall produce evidence of currency and insurance upon request by the Owner. If the Builder fails to insure, the Owner may take out the insurance and the premium shall be added to or deducted from the contract sum as the case may require. g. Occupation or Use by Owner: Notwithstanding Sub Clauses 18 (b) and (c), should any portion of the Works be utilised by the Owner or a tenant of his or their employees during the progress of the Works, then in respect of injury or death of persons and damage to property including the Works, the Work shall be at the sole risk of the Owner. h. Owner Insurance of Existing Structures and Contents: Any existing structures together with all the contents thereof on the Site of the Works shall be at the sole risk of the Owner who shall maintain insurance against the risk of insurable loss or damage thereto [including consequential loss to the Owner]. 19. DEPOSIT 21