There is a myriad of disputes that can occur between homeowners and contractors during construction. The top five, as concluded by construction data trends, are:
- Variations
- Client site access
- Allowance
- Final payment
- Delay related disputes
The most common reason for disputes between builders and owners is classed as ‘variations’. A variation, simply defined, is an alteration to the contract after it has been signed. It may amend a contract term such as removing or adding to the scope of works. To avoid variation disputes, it is a good idea to gain fixed price quotations and estimates of the cost of the works to remove uncertainty. Further, both parties should have the variation expressly authorised in writing prior to the commencement of the works; to allow for transparency and clarity between the parties in addition to aligning with legal obligations.
Construction sites can be dangerous and hazardous places, therefore owner access to them should be well-managed and controlled. To minimise disputes, at the time of signing the contract for construction, the builder and owner should discuss arrangements for safe visitation to the site at scheduled times.
Adjustment to a fixed contract price may occur when it comes to including an ‘allowance’ for supplied items that are the choice of the owner (appliances, fittings and fixtures). When setting allowance amounts, it is vital to ensure that a reasonable estimate is provided for the items subject to the allowance, as disputes can occur when there is a significant difference or alteration in the contract price.
Alleged incomplete works, defects and incomplete documentation often stop the final payment by owners in a building project; resulting in disputes.
Finally, delays to a construction project can occur for many reasons- some of which are out of the builder’s control. Setting a realistic and foreseeable period of building will minimise disputes and allow for easier accommodation of unanticipated delays.
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