Building contract disputes & how to survive them

Sep 04, 2022

Having any building work carried out on your house is highly stressful, there’s no aspect that doesn’t have the potential for drama even if all goes well during the process. Why is it so stressful? Firstly, because it impacts your home, the place that provides you and your family shelter, and secondly because it invariably involves large amounts of money.

To protect your build (and your sanity) it’s important to get the i's dotted and t’s crossed on the construction contract and agree a scope of works before any construction starts – this is to protect both parties. You should also check that your current house insurance covers any renovation works. If you’re building, the vendor will usually have a contract works policy where your bank will be nominated as the financially interested party. As experienced building contract lawyers in Christchurch NZ, many of our clients living through a building contract dispute could have avoided much of the strife had they sought legal advice at the contract stage, or any point before crisis hit.

The relationship between client and contractor balances on a fine line and can easily turn bitter. Unexpected delays, price variations, poor installation, miscommunication, under-delivering or even the company going bust are the ingredients for a building contract dispute.

Get organised

Every building project benefits from you being organised whether there is a dispute or not.

Collate all the paperwork and documents in one file. These include the quote or estimate, the contract, Disclosure Statement and Checklist, letters, emails, copies of text messages, and invoices etc.
Create a timeline of key events and record the dates of first contact, quotation, commencement of work, correspondence, and incidents.
Take photographs throughout the project. Date before and after pictures and annotate with what is wrong with the works.

Talk to the builder

In a builder contract dispute the first step is to communicate with the building firm – email is the best way so there is no room for confusion about what has been discussed. State the issues, how they conflict with the contract and agreed scope of works and iterate the resolution you would like.

During any communication it’s important you remain objective, amicable, and civil. Many disputes and complaints are the consequence of misunderstandings and miscommunication between the client and the contractor.

Steps to resolve a continuing building dispute

If you remain unhappy with how the issues have been addressed by the builder or contractor, the next step is to follow the dispute resolution process stated in the contract – assuming there is one.

Whether the case is a breach of contract, or the challenges have arisen from unclear drawings, specifications, a lack of contract or the terms have been varied without sufficient documentation, it becomes more complex. At this stage of the dispute, legal advice is critical to resolve the dispute and seek a remedy.

Escalating a construction dispute

The reality is nobody wants to enter into litigation and there are other options to exhaust before going to Court, but both parties must be open to pursue a remedy through these channels. These include:

Negotiation: when a resolution or agreement is reached between the parties or through their lawyers. This is common and the most cost effective option.

Mediation: (if included in the contract terms): an independent mediator is appointed to help parties reach an agreement. The process is confidential and the outcome enforceable as a new contract between the parties.

Arbitration: (if included in the contract terms): following failed mediation, an independent arbitrator decides the case on the evidence provided. The process is confidential and the outcome enforceable, final, and binding.

If you are experiencing difficulties with your builder or contractor, it’s critical to seek legal advice from a builder dispute lawyer, so you understand the options available to you. Weston Ward & Lascelles are dispute resolution lawyers who support our clients throughout the whole process. Contact us today to discuss your case call 03 379 1740 or click here to message.

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