Take this as a ‘given’, it is not guaranteed, nor even likely with some contracts, that mediation, arbitration or the contract provisions will protect a homebuilder or renovator in the current climate. If you take legal action to resolve a dispute then think years, and probably over a hundred thousand dollars – and still there is no guarantee of justice.
Typically, consumers will more that likely choose to pay substantial variation fees to get things sorted, just to get the problem out of their life. When things go wrong the consumer is most often blamed; there is no realistic recourse against a company with massive turnover and armies of lawyers, against the small family with a dream and a debt.
Tip #1: The best hope of averting a tragedy is in the early days of selecting a builder and preparing design documentation, well before work begins. Take little comfort from your contract. Typically, these are standard industry contracts created by the building association and therefore in the builder’s best interest – not consumers! – unless you can afford to enforce the contract in court.
Tip #2: A builder may be capable of good work, but whether you get it is a very different matter.
Tip #3: Heed the hesitations of friends when you ask for opinions. Many builders are blaming the consumer and so friends may say things like ‘they said we were an exception and they don’t usually have these problems’, or ‘we paid heaps in variations’ which is an indication of insufficient planning and design before building (and payment) begins.
Tip #4: Don’t assume it will be better for you, no matter how you try. Don’t trust publicity, only word of mouth from trusted consumers with jobs on a similar scale to your own really count. Always seek references and if you cannot get them worry a lot!
Tip #5: Never take Industry Awards as any indication that builders can do your job, as opposed to a job for an Award. There are no awards for integrity. There’s a risk that if your job’s progress doesn’t look like it will befit Award nomination those builders addicted to them will lose incentive to finish your job or fix your faults.
Tip #6: Things are not always what they seem – paying more doesn’t always mean a better job. Ask around, not just the clients recommended by builders – do your own research! All builders probably have some happy clients. You want to find one with all happy clients, within reason.
Tip #7: Be aware you may want to trust too much to get the job underway, and this is your weakest point.
Tip #8: Take note that lines like ‘we have a waiting list’ ‘we’ve just had a cancellation so we can take you on if we get started by…’ should be warning signs that you are at risk. Proceeding in a rush, without detailed plans and designs, places you in an incredibly vulnerable situation. If something goes wrong you have virtually no effective recourse.
Tip #9: Look with suspicion on a contract with a low penalty for delay. The builder’s greatest weapon in a dispute is delay: take delays seriously as soon as they begin. They MAY be a warning sign.
Tip #10: If you are not happy with what is on offer, ignoring it won’t make it go away. It quite likely that it come back to you as an expensive problem.
Tip #11: Before signing up, call a few lawyers to see if they would represent you against your builder if it comes to a dispute. If you can’t find a lawyer who could represent you because they all represent the builder, take note.
Tip #12: Don’t trust membership of a professional association like the MBA or HIA as a sufficient recommendation in itself. Almost all complaints received by Zebra so far mention membership of professional associations.
Tip #13: Look at your contract. Don’t sign it if you don’t feel your interests are protected. Take it to your lawyer, but make sure they know what they are doing: some see the HIA logo and say it must be good. These people obviously don’t handle disputes. If your builder insists on a dodgy contract, shop around.
Tip #14: You have lost your power as soon as you have signed. Builders will demand payment at every stage and threaten not to proceed until they get their money even though things aren’t finished. Most contracts only offer a small penalty for delay.
Tip #15: Take notes at ALL meetings and get them signed off by both parties. Keep a photographic record and a diary of work done and personnel attending day by day, as accurately as possible. Read and correct all minutes and make sure these are signed off. Odd inclusions may be evidence that your builder is anticipating a dispute. Query these and correct them.
Tip #16: Plan how you will file and store ALL papers etc before the job starts. Use mail and NOT email and keep an organised copy of everything. Sign and date all emails, and get the person responsible for your job to do so. You may be blamed for problems within their staff, so be prepared to defend yourself and put the problem back to the most senior person.
Tip #17: If asked by the builder to do something, like choose a colour, take a diary note and ask for a due date, and comply, and send a note acknowledging this. The little things can become very significant. This will not necessarily prevent the problems, but you will be less vulnerable to blame, and this will help your mental health. If you fail to do so, this may be used as evidence that delays were your fault. When a dispute is in progress no one will care that it didn’t really matter to the progress: it’s the builder’s word against yours.
Tip #18: If your builder gets uncomfortable with this level of correspondence it’s better to know early, and decide for yourself why. Getting out early may be a better option, even if costly. Reality check: though you’ve done nothing wrong and you’re a nice person you will lose lots of money if you have a builder without good management practices and integrity. You could lose a lot more: your health, your happiness, your house, and even end up with a lifetime of debt.
Tip #18: Remember that throughout the job warning signs need to be taken extremely seriously.
Tip #19: Research your builder THOROUGHLY as he MAY be working with the cover of multiple business names.
Tip #20: Keep a note of any seemingly suspicious appropriation of faulty or wrongly ordered materials or oversupply. This may be a criminal matter, and such costs would force up the cost of insurance – Zebra is interested in hearing about this in order to discover any 'other' common practices!
Zebra Australia believes that it is appropriate to support the presentation of a Builders Collective as it encompasses all our past and current concerns and more. Also, that model included the solution for a reform that is based on the holistic open and transparent Queensland model of industry management – one that also delivers appropriate consumer protection. This model has been professionally researched and we endorse a uniform national approach to be overseen by the Federal Government.
Zebra Australia believes that the Australian building industry is deserving of ‘the Queensland approach', undertaken with the appropriate oversight from the Government of Australia. ZA is committed to working towards seeing this, or a like ’system’, being adopted Australia wide – and especially so in Tasmania at the moment.
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