Attwood Marshall Lawyers Partner and NSW Law Society Accredited Specialist in Dispute Resolution, Charles Lethbridge, discusses emerging construction horror stories which are putting the spotlight on law reforms to better protect consumers.
Call for crackdown on dodgy builders
Despite a call to apply greater scrutiny on the building and construction industry, there continues to be a significant number of homeowners speaking out and seeking legal assistance after facing the traumatic and costly consequences of engaging an incompetent builder to build their home.
In the media recently, more and more stories are being reported about how inadequate regulations and lack of consumer protections are failing homeowners.
ABC News recently reported on a story about two friends who engaged a builder to build their home, only for the house to become their biggest nightmare. They described the experience as horrendous, and the ordeal has left them financially stricken and depressed. As the story goes, there was significant delay in starting the project after the pair engaged the builder, with the concrete slab being laid 7 months into the project. It is reported that the integrity of the slab was jeopardised and began to fracture shortly after it was laid. The building was never completed before it had to be demolished. The friends were grateful they were able to demolish the house and break their contract with the builder with the help of a construction lawyer, despite having to go through the stressful experience. Had they completed the build, they would have faced ongoing costs trying to fix defects and issues with the home.
With homeownership a dream for many Australians, there is a serious need for consumers to better protect themselves when building a home.
We see it all too often when a relationship between a homeowner and their builder breaks down and disputes arise over defects, delays in construction, and quality of workmanship (or lack thereof). If these disputes are not handled effectively at the earliest opportunity, the consumer is left in a position where they suffer significant financial loss, not to mention emotional stress.
There needs to be adequate regulations to ensure Australian homeowners are protected, particularly those who put their faith in builders and have no prior experience dealing with the building industry.
Excited homeowners are put under pressure to sign comprehensive documents when engaging a builder to build their home. In many cases, people sign these documents without obtaining legal advice beforehand. These contracts can be lengthy and the fine print difficult to understand. For this reason, it is imperative that consumers understand their rights and responsibilities under building contracts from the get-go and get advice before they sign anything.
“Building Confidence” Report
In 2018, Professor Peter Shergold and Bronywyn Weir released the “Building Confidence” report. The report provided observations on the compliance and enforcement systems for the building and construction industry in Australia. The authors of the report engaged with the Building Minster’s Forum (BMF), industry regulators, departmental officials, and the greater industry to put together recommendations for a national best practice model which aimed to strengthen the effective implementation of the National Construction Code.
The problems homeowners are facing when building a home are widespread and Professor Peter Shergold and Bronwyn Weir expressed their concerns about the nature and extent of these issues in their report.
The goal of the report was to enhance public trust through effective implementation of building and construction standards that protect the interests of those who own, work, live, or conduct their business in Australian buildings.
24 recommendations were made in the report which focussed on:
- the registration and training of practitioners
- the roles and responsibilities of regulators
- the role of fire authorities in the building design and approvals process
- the integrity of private building surveyors
- the issue of collecting and sharing building information and intelligence
- the issues of adequacy of documentation and record keeping
- the importance of inspection regimes
- issues related to post-construction information management
- compulsory product certification system and building product safety standards
In March 2019, the Building Ministers agreed to the implementation plan. In November 2020, Building Ministers acknowledged the impact of COVID-19 to the building industry and recognised the importance of maintaining momentum on the reforms despite the challenging COVID climate.
Although Building Ministers delivered 10 of the recommendations by June 2021, with the remaining recommendations expected to be finalised by December 2021, it is clear there is still a lot of work to be done to protect consumers.
Lack of inspectors causing major problems
Building inspections are an essential part of the construction process. However, without independent oversight throughout the construction of a home, it can go unseen if all is not up to scratch.
Builders are stretched with budgets and resources and some may cut corners, knowing there is no independent oversight of the project. Customers put their faith in builders to do the right thing and deliver the building at an acceptable standard, which most do, however there are many that cut corners.
This issue has been exacerbated during the COVID-19 pandemic with the building industry facing the perfect storm with construction sites being shut down, scarce building supplies, and unprecedented demand. With builders unable to pass on the extra costs of materials, many find themselves stuck between a rock and a hard place trying to navigate the best way forward when delivering projects at a reasonable cost and timeframe.
Although there are government warranty insurance schemes in place to protect consumers when a licensed contractor does not complete the contracted residential construction work, or if the contractor fails to rectify defective work, the maximum payout is often only a small portion of the cost required to fix defects and other structural issues.
Consumers unhappy with their build who have suffered significant financial loss are left with few options other than engaging an experienced lawyer who practices in building and construction disputes.
Attwood Marshall Lawyers – experts in resolving building and construction disputes
Attwood Marshall Lawyers have a dedicated commercial litigation team who are well-versed at assisting homeowners and builders in resolving disputes that arise throughout the course of construction. Equipped with a Law Society Dispute Resolution Accredited Specialist, we have an enviable track record of assisting our clients throughout Queensland and New South Wales to achieve satisfactory resolutions without having to embark upon the expensive, lengthy, and uncertain court process.
We have access to experts who can provide independent reports on issues in dispute, including structural problems and rectification works required (as well as the costs involved and who is responsible).
Litigation in any form is a stressful and costly exercise, especially when the parties are deeply entrenched in their own positions. We have found that bringing the parties together by way of an informal settlement conference with assistance from lawyers, or mediation with an experienced and independent mediator are extremely efficient and successful processes for resolving building disputes.
We want to help you resolve your dispute and take away the stress in your life.
If you are involved in a building and construction dispute, please contact our Department Manager, Amanda Heather, on (07) 5506 8245, email firstname.lastname@example.org or free call 1800 621 071 to find out where you stand.