Trade/material delays & cost increases

Master Builders is here to help navigate the many supply
issues for building materials and trades

Master Builders is here to help navigate the many supply issues for building materials and trades

QBCC ADVICE

OUR SHORTAGES STATEMENT

Builders and suppliers across Queensland are continuing to experience extreme supply problems across many building materials and trades. This is having an impact on the progress of building works as well as causing a significant increase in costs.

The Australian Bureau of Statistics reports that the cost to build a house in Queensland has increased on average by 18 percent over the past year and a staggering 42 per cent since the onset of COVID-19.

A number of factors have come together to create a “perfect storm” including COVID-19 supply chain disruptions, global surge in demand for building materials, international events, and impacts of severe weather events.


How to manage delays and shortages

The Queensland Building and Construction Commission (QBCC) has recognised the severity of the problem and is providing both advice and access to an Accelerated Builder/Consumers Dispute Framework.

The reality is that cost increases and delays are unavoidable and will need to be factored into build contracts.

Where contracts have already been signed, we urge contractors to work closely with their clients to discuss alternative timeframes and contract variations. Timely and open communication with the client is often the easiest way to avoid a dispute.

To assist we have prepared a general statement about the current situation that may assist members in confirming and explaining the current situation to clients.

OUR SHORTAGES STATEMENT

Where contracts are yet to be signed, it is important that you can commit to the terms of your contract in light of the trade and material shortages and cost increases.

Do not enter into contracts without a clear understanding of what you are agreeing to do under that contract and without ensuring that you can deliver what you are agreeing to do. Do not assume your usual estimates are still accurate. Check with your sub-contractors and suppliers first.

It is only in certain limited circumstances that you will be entitled to an extension of time to the Date for Practical Completion under the terms of your contract. This is also restricted by legislation in Schedule 1B of the Queensland Building and Construction Commission Act 1991.

If the HomeBuilder grant also applies, the owner may become ineligible for the grant if you do not complete the build within the applicable timeframes.

Some builders have sought to include special conditions, provisional sums or more frequent progress payments in their contracts to deal with the problem; however, some have had those contracts rejected by mortgage lenders. These provisions may also not be legally enforceable because you are required by legislation to ensure that you have certainty in domestic building contracts with very few exceptions.


More information

COVID-19 CONTRACT INFO

Our Members Legal team are also on hand to provide advice specific to your contract and situation. We are here for you – contact us for advice if you need to.

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