CAN YOU CLAIM FOR VARIATIONS THAT DOES NOT COMPLY WITH THE REQUIREMENTS UNDER THE BUILDING CONTRACT?
Yes.
The building contract has a specific process that the Builder and the Homeowner needs to follow, in particular the builder. However, this does not always happen.
If the builder has carried out variation works without following the process under a building contract, the builder then can put a claim in the Tribunal (NCAT) for the work carried out under a principle called Quantum Meruit.
WHAT IS QUANTUM MERUIT?
Quantum Meruit is a principal which allows a Builder to claim for work that has been carried out on the owner’s instructions. However, those instructions do not follow the required process under the contract.
This principle essentially means that the homeowner is not unjustly enriched by receiving a benefit for free. Generally, if the variation work does not comply with the building contract then Section 10 on the Home Building Act 1989 prevents the Builder from making a claim under the contract for that work.
WHAT DOES THE BUILDER HAVE TO PROVE?
The Builder has to show that the work was requested or required by the Homeowner. It must be shown that the Builder carried out the work and the work is complete. It is also important to show that the Homeowner understood that the work carried out was not a gift of any sort and that the Homeowner benefited. Another important element is that the Builder had advised the Homeowner of the price of the variation. This doesn’t prevent the Builder from making a claim if the Builder had not advised the Homeowner of the price.
The Builder would then generally have to prove, upon making a claim in NCAT (NSW Civil & Administrative Tribunal – for under $500,000) and support that claim with evidence that the cost charged is fair and reasonable.
WHO SAYS WHAT IS FAIR AND REASONABLE?
This is supported by expert evidence.
CONCLUSION
Therefore, regardless of whether the Builder is using a HIA Building Contract, MBA Contract, NSW Fair Trading Contract or any other Building Contract, the Builder has the right to recover monies for the work carried out by the Builder.
If you need help or assistant in making a claim in relation to claims for variations works, please contact us at Adams & Partners.
Written by Atul Singh