Most building contracts allow the builder to claim an extension of time for completion of the project where there is a delay which could not reasonably be foreseen at the time of contract signing. Such delays could include strikes, unfavourable weather and unavailability of materials or labour. However, the exact terms of the building contract are critical and might allow extension of time claims to be disputed.
A number of decisions by the Building Disputes Tribunal (BDT) suggest that a builder should follow certain “best practice” procedures to ensure that an extension of time claim is upheld by the Tribunal. Failure by the builder to follow these procedures may invalidate the claim and result in damages being payable to the client for time delays on the project.
A first issue relates to providing the client with written notification of a delay within a reasonable time of the delay occurring. In one case, the contract allowed the builder to give notice of delays up to 28 days after practical completion. The BDT ruled that this was unreasonable as it did not provide the homebuyer with any ability to determine the project’s progress during the construction period. Furthermore, a failure by the builder to notify within a reasonable time of the delay occurring meant that the right to claim might be waived.
In short, claims for time extensions might not be allowed by the BDT if a builder does not notify a client within a reasonable time of the delay occurring.
A second issue relates to the nature of the claim. The BDT’s view was a claim cannot be made for “general trade shortages”. While a builder is entitled to claim for trade shortages, this should be substantiated by documentary evidence (such as a log book) showing how the specific delays have affected the particular project. Trade shortages which were well known at the time of contract signing and/or that result from a builder simply allocating its trades to other jobs might not be successful in the BDT. Claims for wet weather delays can be validated from Bureau of Meteorology printouts and the adverse weather must cause actual delays to work on the project. For example, if a house already had roof cover, claims that wet weather caused delays to internal plastering, painting or tiling work would be more difficult to sustain.
Where delays and contract time overruns occur, claims for time extensions might not be a simple matter. They need to be dealt with carefully by the builder and client in accordance with the terms of the contract.