12 February 2021
We recently reviewed the Master Builders Residential Building Contract (RBC) and will soon be launching a fresh new version.
The new version (available in eDocs and hardcopy from Monday, 1 March 2021) is easier to read and complete. We’ve addressed some common issues that arise in the industry that can impact on the builder’s ability to get paid and avoid disputes.
Summary of changes
Contract schedule changes
- Home Warranty Insurance premium is separately identified in the contract price to address GST issues
- Home Warranty Insurance premium is now separated out in the staged payments tables, as this must be paid from the deposit. This ensures the builder cannot claim the premium plus the maximum deposit.
- Builders can now note in the warning box at Item 3 any special conditions that can change the contract price (this is a requirement of the QBCC Act)
- It is now clear that the allowances included for prime cost items and provisional sum items do not include the builder’s margin. The margin that may be included for these items is included elsewhere in the contract price.
We have also added some additional provisions that generally make it a better contract. These provisions provide significant benefit for users by:
- Clarifying when the builder is entitled to make a claim for payment
- Allowing the builder to make a final claim for payment at the end of the defects liability period (in case there is still outstanding money under the contract at that time)
- Assisting the builder to use the adjudication process under chapter 3 of the Building Industry Fairness (Security of Payment) Act 2017 if the builder is not paid, although this option is not available under every contract in the residential sector
- Permitting the builder to claim additional costs incurred under the contract in progress claims or the final claim, even where the builder has not specified that right elsewhere, e.g., variation claims, PC/PS claims, changes to statutory obligations
- Clarifying the process that applies when the owner requires finance under the contract
- Allowing the builder to terminate the contract if the owner does not confirm that they have obtained finance within an agreed timeframe
- Allowing the builder to recover additional costs to overcome discrepancies in the owner’s documents
- Requiring the owner to give additional warranties to the builder when providing documents under the contract
- Clarifying the builder’s obligations in relation to statutory requirements and to give the builder the right to recover the cost of any additional statutory inspections requested by the owner under the recent changes to the Building Act 1975
- Clarifying when the builder is entitled to claim an extension of time to the date for practical completion
- Clarifying when the builder is entitled to suspend the works under the contract
- Providing a rectification program for defects identified by the owner during the defects liability period. This has been included to assist the builder to streamline site visits for rectification works at two months, four months, six months, post-practical completion and at the end of the defects liability period where possible
- Providing the owner with the right to terminate the contract if the builder’s QBCC licence is suspended or terminated; however, this is not an immediate right to terminate, for example, the builder must be given an opportunity to remedy the breach before termination. This aligns with the requirements of the QBCC Act.
- Providing additional options for dispute resolution
- Clarifying the builder’s obligations in relation to work, health and safety
- Clarifying that the contract is a construct-only contract unless expressly agreed otherwise
- Providing that the Christmas shutdown period are non-working days; however, the builder must still submit a claim for an extension of time to the date for practical completion if the works are expected to extend into or past the Christmas shutdown period
- Requiring the owner to indemnify the builder for documents and products/materials that the owner provides for the contract and for any actions it takes and/or its agent or contractors take, and
- Clarifying that the owner is responsible for, including all costs associated with, bringing services to the land.
Get your hands on the new contract
The new look RBC will be available from Monday, 1 March in both eDocs and hardcopy (purchase via the eShop or at your local regional office. We recommend calling your local regional office to check stock levels to avoid disappointment).
If you’re a current eDocs user and have an RBC document in progress, we recommend reading the alert on the eDocs noticeboard that covers key areas of change that you need to be aware of. It’s important to note that the old version will not be available after Sunday, 28 February 2021.
If you are a hardcopy user and still have old versions to use, rest assured our Members Legal team will continue to support and advise you.