Reminder: make sure you read and understand your building contract!

In a recent High Court case a couple had engaged a builder to build their new house. After they had made several progress payments on the build, they received a payment claim from the builder for the final amount owing under the contract.

Under their building contract, the couple needed to serve a payment schedule on the builder within a certain time frame setting out the matters in dispute if they wanted to dispute the builder’s claims. The couple was not happy with the amount of the builder’s claim, and they also believed they had a counterclaim against the builder for defective building work.

However, because they did not serve the payment schedule on the builder within the time frame provided in the contract, the builder was able to claim not only the full amount originally claimed under the contract, but also interest and debt recovery costs.

This case is an important reminder to ensure you understand your building contract, and know what to do if things go wrong and/or you are not happy with the build.

You should also be aware that if your building contract does not specifically provide a time frame for you to dispute an amount owing, under the Construction Contracts Act you need to provide a payment schedule within 20 working days.