Cost escalation
Fixed price contracts are the main pain point, with most builders and subcontractors at the end of the supply chain left unable to absorb extra cost.
The number one ‘ask’ coming from our members is the ability to deal with price hikes in residential contracts that cannot be planned for – using cost escalation clauses.
While these clauses can be included, there are important caveats. Will clients accept them, either directly or through their financier? Will they stand up if challenged in court?
Including cost adjustment provisions in your contract is a challenging area to get right. A place to start is our Cost Adjustment Provisions Guidance document. We have prepared general advice on our Managing cost increases page.
We also recommend seeking legal advice tailored to your individual needs and circumstances. The Members Legal team is here to help, give us a call on 1300 30 50 10 or contact us to get started.
Responding to cost increases and supply delays may also involve negotiating with clients. To support these discussions, Master Builders has prepared downloadable open letter to set out the context, which you can access here.
Dispute resolution
Master Builders contracts include the option for a without prejudice meeting with a Master Builders mediator, give us a call on 1300 30 50 10 or contact us to request one.
The Queensland Building and Construction Commission (QBCCs) Mediation and Conciliation service may also assist with resolving residential contract disputes and working through contractual issues with your clients. To access the service, you must be a QBCC licensee or a property owner and a party to a domestic building contract. The services covers disputes between homeowners and builders, or between builders and subcontractors. Work must have commenced under the contract, and you must have made a genuine attempt to resolve the dispute with the other party before applying.
Workforce
Members are also beginning to ask questions about standing down staff. This is important to get right. It is not sufficient for there to be not enough work. Check with our Workplace Services team first, give us a call on 1300 30 50 10 or contact us.
Government help
The Australian Tax Office is providing temporary relief for businesses affected by fuel supply issues. This may include easier payment plans, reductions in interest and penalties, and help adjusting PAYG instalments where income has fallen. Some compliance activity and, in some cases, debt collection will be reduced or paused for the most affected industries. Businesses can access this support through: ATO fuel response (Australian Taxation Office).
The Queensland government offers a number of business advisory and mentoring services. Find the one that is right for you here: Adviser finder (business.gov.au).
You’re not alone
Having to deal with the challenge of price hikes again so soon can be overwhelming. You’re not in this alone.
Our legal, technical and workforce teams are standing by with practical advice and support, so please, reach out.
And if you need to talk to someone or get help with your mental health there are many services. To connect with the one that’s right for you, visit our directory.