27 May 2022 15:45
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Public warning issued on making payments outside of building contract terms

Home owners in Queensland are urged to seek legal advice before making payments that fall outside the terms of a fixed price building contract under the guise of ‘contract variations’.

The Queensland Building and Construction Commission (QBCC) has issued a public warning under the public under section 20J(1)(i) of the QBCC Act 1991.

The QBCC says that some building contractors are demanding additional funds from property owners to cover increased materials and labour costs.

“𝗪𝗲 𝗵𝗮𝘃𝗲 𝗶𝘀𝘀𝘂𝗲𝗱 𝗮 𝗽𝘂𝗯𝗹𝗶𝗰 𝘄𝗮𝗿𝗻𝗶𝗻𝗴 𝗮𝗯𝗼𝘂𝘁 𝗺𝗮𝗸𝗶𝗻𝗴 𝗽𝗮𝘆𝗺𝗲𝗻𝘁𝘀 𝗼𝘂𝘁𝘀𝗶𝗱𝗲 𝗼𝗳 𝗯𝘂𝗶𝗹𝗱𝗶𝗻𝗴 𝗰𝗼𝗻𝘁𝗿𝗮𝗰𝘁 𝘁𝗲𝗿𝗺𝘀.”

Home owners in Queensland are urged to seek legal advice before making payments that fall outside the terms of a fixed price building contract under the guise of ‘contract variations’.

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This is to protect the home owners from unwarranted payments.

QBCC Commissioner, Anissa Levy, says that there may not be any contractual basis for contractors to demand payment for increased labour and material costs as ‘contract variations’ under a fixed price contract.

“The QBCC urges home and property owners to seek their own legal advice before agreeing to or paying an increase in the contract price for a fixed price contract.”

Ms Levy says further adds that as a contractual issue, this matter would usually be considered a civil matter and the QBCC would not be able to become involved.

“However, it could be a breach of a contract, which could potentially allow the contract to be terminated and a claim lodged by the home owner through the Queensland Home Warranty Scheme.”

Parties trying to resolve contractual issues over material or labour shortages should consider mediation with the Accelerated Builder/Consumer Dispute (ABCD) Framework.

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