- This topic has 7 replies, 7 voices, and was last updated 8 years, 12 months ago by .
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Our building has extensive waterproofing issues and we have trusted the strata manager/building consultants/engineers to recommend several tenders for the scope of works (balconies, bathrooms, pergolas etc).
The contract we’ve ended up with is 126 pages long, is it common practice to have a lawyer look over the contract before signing? Its quite an extensive and expensive remediation, somewhere around the $800k mark and no one on the EC has expertise in these matters. Ultimately we want to protect ourselves as much as possible from the final cost blowing way out of proportion due to tricky/vague wording.
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If your OC feels uncomfortable signing this document then I see no reason why the OC shouldn’t have a lawyer look over the Contract. A lawyer’s fee to provide this scrutiny will be a small price to pay compared to the overall Contract price. However, if too many changes are made then your OC may face the risk of the successful Tendering company pulling out and then you will be back to square ‘one’.
It is often remarked that consumers don’t know the details of legal agreements that govern the most important things in their lives – house purchases, off the plan, insurance, mortgages. It is only when things go wrong that they become aware of specific conditions in those agreements, which are usually not in their favour.
The contract price is $800K, and the scope of works is likely complex. There is no way I would enter into a contract like that without a review by someone who is qualified. Bear in mind that the contract has been prepared for the other party, and the terms will reflect that. At the very least it will give you certainty as to what you are actually paying for.
I’d be looking at all the ghings the builder excludes.
Like I bet they do not guarantee that after they finish the work that the building is waterproof.
My experience is that the longer the contract the worse off the consumer is.
If the lay person cant understand the contract, you can be sure that if there is a dispute its going to require lawyers rather than a simple discussio to resolve.
Id pick a different builded
Robert
Providing that your “building consultants/engineers” are appropriately qualified, they generally have the professional expertise to properly advise, make recommendations, prepare and manage such contracts on your behalf. By appropriately qualified, I mean the person who is responsible for providing the service to you must have reached a status or grade within their relevant peak professional organisation that qualifies them for this type of work. For example, an engineer should have ‘chartered’ status under Engineers Australia, architects should be ‘registered’ under the Australian Institute of Architects or other equivalent memberships from other peak professional organisations. Simply being a paid up member of such an organisation would not be adequate qualification to provide the required services.
In addition, you should also ask your “building consultants/engineers” to demonstrate to your satisfaction that they are appropriately qualified to prepare and manage the contract by providing their qualifications, experience and references on similar work completed. If you are not confident that they are qualified after doing this, you should consider using an alternative consultant/engineer or consider the legal option.
Our scheme in NSW has just entered a $1million contract – predominantly covering works to replace defective roof membrane.
Our lawyers reviewed the contract and added clauses to cover ‘proportionate liability’ and ‘delay liquidated damages’. If you haven’t heard of these issues then you definitely need a lawyer.
The Strata Committee has a duty to act in the best interests of the owners, and that would include seeking appropriate advice on a complex contract for expensive works, in order that the owners’ interests are protected. The only person qualified to do that is a lawyer expert in that field. Building consultants and engineers are not qualified to give advice on contracts, and I am sure if you asked them they would tell you that.
My 2c. You should pay a consulting engineer to oversee the work and approve progress claims from the builder and gather tenders and make recommendations. That will take a lot pressure off the SC. Normally CE charge by the hour or by a percentage of the total contract price. You need to work out which option will be more cost effective. Percentage based could cost more if the work and scope blow out. Take your time on large contracts and make sure everybody is in on the detail. Often its a good idea to break teh work down into smaller chunks. That way you can flick the builder and re-tender if needed.