9 things to check before signing your HIA Building Contract
When you are about to sign your HIA Building Contract, it is so important you know the inner details of the contract.
Many homeowners building for the first time aren't aware how much is spelled out in the HIA Building Contract. It provides a step by step process for everything and anything on your build, including how to manage variations, delays, compensation and design changes.
Although the success of a project largely relies on the quality of your selected builder, there are ways to take precautions to ensure your safety during the build process:
Here are 9 things to check are covered in your HIA Building Contract before you sign:
✅ Quantifiable Start Date - Make sure the anticipated start date is a quantifiable date (i.e 20 Jan 2024, rather than a period relating to an event or calculation like ‘30 days’). It’s important to have clarity on when works will start and how to calculate that date.
✅ Reasonable Liquidated Damages - Ensure the daily rate for liquidated damages represents a genuine pre-estimate of costs if completion of the build is late. If your not sure how to calculate this, it’s one of the key discussion points in our Building Contract Reviews.
✅ Understand the Special Conditions - Special Conditions are where most nasty clauses that override the protections in the General Conditions are found. Make sure you understand how any builder proposed special conditions impact the general conditions, and seek help from a Building Contract expert if you aren't sure. Generally stay away from special conditions that touch on price increases, delays or EOT entitlements as these are already covered in detail in the General Conditions and amendment requires careful consideration of the wider contract implications.
✅ Order of Precedence - Ensure the order of precedence between the contract and design documents is clear. In most cases, the Special Conditions sit ahead of the General Conditions followed by specifications and plans.
✅ Procedure if the builder discovers ambiguity in design drawings - Make sure there is a clear procedure to follow if the Builder discovers an ambiguity or discrepancy in the documents and you have the opportunity to give instruction on how to proceed.
✅ Authority Approvals - ensure the responsible party for obtaining Authority Approvals (e.g Building Permits, Planning Permits, utility connections) is clearly defined.
✅ Delay Clauses - Review the delay clause and qualifying delay events in detail before executing your HIA building contract. Check a notification process is described in detail and check the reasons for compensable delay acceptable.
✅ Investigate ground conditions - Ensure foundation testing has been completed before the contract is executed. Clarify with the builder that the findings of the foundation testing has been incorporated into the building contract.
✅ Working Days - Ensure that the Working Days your Builder will be working on-site is expressly clear in the contract. This is important to ensure any extensions of time can be assessed fairly.
Signing your HIA Building Contract doesn’t need to be a scary process
The more clients understand the finer details in their contract, the easier managing it all gets.
So work hard on understanding your contract!
Thanks for reading and catch you in my next post :)
Annelyse
B. Construction Management | GD. Construction Law
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Written by Annelyse, Building Contract Enthusiast, Project Manager, and founder of Build Together Project Management.
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