1
Q
What is a Building Approval?
A
- You require building approval, also called certification, for development that involves carrying out building work under the Planning Act 2016 (PA), as well as under specific building legislation.
- Building approvals require assessment against the Building Code of Australia (forming Volumes 1 and 2 of the National Construction Code) and Queensland’s building and plumbing regulations.
2
Q
What is the role of the architect under the construction contract?
A
- Administer the contract on behalf of the owner
- The architect is the owner’s agent for giving instructions to the contractor
- Act independently when acting as assessor, valuer or certifier
- The architect is not the owners agent for giving or recieving notices under Dispute Resolution & Termination of Engagement
3
Q
Who certifies building at completion and performs a final check? Who undertakes the fire commission check? When are you totally finished?
A
- Certifier certifies building
- Architect deems practical completion & final completion
- 7 year statute of limitation
4
Q
What does the building certifier need for a building approval?
A
- Plumbing approval
- QFRS Certificates
- Form 15’s
- Architectural Drawings
5
Q
What is Operational Works
A
Council infrastructure to be provided by the contract in order to fulfil the DA & BA as per the authority’s requirements.
6
Q
Before work on site, builder needs?
A
- Contract executed
- Insurances
- Offcial documents required under contract schedule
- Building Approval
- Plumbing approval
- Dilapidation survey of the site and adjacent properties
- Surveyor to set out the works
7
Q
Before make first progress payment the contractor must ?
A
- Have in place the security
- Have in place the insurances, unless owner is taking out the insurances
- Have given the architect the program
8
Q
Under the terms of the ABIC contract the contractor is required to produce a program showing how the works will be completed. Should this program become part of the contract documents?
A
- The Program needs to be given to the architect within the required time as outlined in the contract after the contractor taking possession of the site (10 days)
- However the program does not form part of the contract documents because it is the contractors responsibility to meet PC
9
Q
You have received the first progress claim from the contractor and it appears that he is front loading the contract and over claiming on the project. What can you do?
A
- Assess the claim vs progress on site
- Communicate with the builder where you think the difference has come from to ensure you’re suspicions
- note reasons for difference on progress certificate and issue the progress certificate with the corrected amount owed by the owner
10
Q
If the builder is claiming for products ordered but not on site can you approve the claim?
A
- Short answer is yes – if agreed by both parties + ABIC MW has provision for this below
- Contractor warrants that any off-site plant or material claimed for payment:
- is as specified by the contract documents
- is stored securely
- is insured appropriately, noting the interest of the owner and
- wil become the property of the owner on payment of the amount claimed
11
Q
What can a subcontractor do if they are not paid by the head contractor ?
A
- In Queensland, subcontractors can rely on two pieces of legislation to secure payment for works they’ve done. These two pieces of legislation, Subcontractors Charges Act 1974 and the Building and Construction Industry Payments Act 2004 (BCIPA) create a process which subcontractors can utilise to ensure they are paid.
- This is done by handing a charge to secure money payable by the head contractor. The charge is given to the developer to redirect money otherwise payable to the head contractor to the subcontractor. This charge can then be enforced in Court.
- Contractor can be asked to provide Stat Dec that sub-contractors have been paid. Can reject progress claim otherwise. This is state legislation, not a contract obligation
12
Q
What are Prime Costs & Provisional Sums?
A
Provisional Sum:
- Sum excl. of GST for performance of foreseeable necessary work, including the supply of materials, not fully described by the contract documents OR
- for connection of infrastructure service to the site if detail of the service required or the supplier was not known or had not been decided on the date the contract was signed.
- eg. joinery, landscape
Prime Cost Sum:
- Sum excl. of GST for a foreseeable item of material or equipment, the precise identity of which was not known or had not been specified in the contract documents
- Sum excl. of GST for an allowance for payment of a fee or charge to a relevant authority.
- eg. floor tiles, tapware, door hardware
13
Q
What are the risks with using either prime cost and/or provisional sum?
A
- Over-reliance on these estimates can result in inaccurate conclusions concerning the total contract price
- Undefined amounts of money & the owner bares the risk
14
Q
In an ABIC contract what is the procedure to be followed when using prime cost and/or provisional sums?
A
- Fill out the schedule in the contract
- Get them priced/quotes
- Make sure client agrees with them
15
Q
What power does the architect have In giving instructions on Latent Defects?
A
- The architect cannot give the first instruction to correct an outstanding defect or to finalize any incomplete necessary work after the end of the defects liability period and final certificate has been issued.
16
Q
When excavating, the contractor uncovers a footing of the adjacent site’s heritage building – how do you proceed?
A
- This is an encroachment if ABIC MW
- Contractor should suspend the necessary work in the vicinty of the situation, ensure that any adjoining structure is stable and request instruction from the architect. (Tell them to do this if they havent already)
- Contractor should notify of a delay, if it will cause a delay
- Inform the client, they may need to speak with the owner of the neighboring site to come to an agreement on how to proceed
- Client may require legal advice
- Consult with heritage architect, structural engineer, geotechnical engineer, surveyor (check setout) and discuss ways to proceed, this may include altering the design.
17
Q
If a safety issue occurs on site, what do you do?
A
- Safety is utmost importance. If safety issues become apparent;
- Go to site,
- Stop work if necessary
- Call Ambulance
- Call consultants to site if necessary.
- Keep Client informed
- Advise client to seek legal advice
- Talk to PI Insurance if claim could arise
- Ensure works continue if not a safety issue
18
Q
When assessing a progress claim from the contractor, what must you take account of?
A
- any adjustments to the cost of building work
- proportion of the cost of building work claimed representing the value of work completed, making allowance for the cost of rectifying defects
- proportion of the cost of building work claimed representing the value of materials and equipment delivered, ensuring it has been incorporated/fixed.
- proportion of the cost of building work claimed representing the value of off-site plant or material
- an allowance for cash retention if thats the chosen security
- any claim by the owner for set off monies
- owners entitlment to liquidated damages
- GST
- Stay fair and impartial. Do not let builder/client sway your decision
- Can assess against the trade breakdown & the % complete or use Quantity Surveyor to determine level of completeness
19
Q
What happens if owner takes possession early?
A
- Advise client not to.
- Check with the contract to see if there are provisions for staged practical completion
- Make sure they have their insurances in place.
- Project is Deemed Practically Complete – early occupation
- Certificate of occupation required (/building classification) is necessary prior to occupancy
- There could possibly be additional costs to the client and to the consultants for builder to have to complete works around an occupant.
- Defects Liability Period Begins
- Half of retention Released
- WH&S issue as some of the works are still incomplete
20
Q
You have notified the contractor and he is refusing to come to site and rectify defects during DLP. What do you do?
A
- Inspect the defects
- Use the security remaining as negotiation
- If contractor refuses to rectify the defects, use the money to have another contractor to do the work
21
Q
Pedestrian has been injured adjacent to site. What do you do?
A
- Call an ambulance if required
- Check contract regarding the insurances by the contractor
- (public liability insurance) and how to proceed
- Contractor will have to notify their insurer
- Discuss workplace health and safety with contractor, perhaps an audit needs to be conducted by appropriate authority?
- The site and adjacent areas are covered under the contractor’s insurances (contract works insurance and public liability insurance)
22
Q
How is practical completion determined ?
A
- 10 days prior to anticipated practical completion the contractor must inspect the works and prepare a schedule of defects and incomplete work. At the same time they must give the architect a timetable for the correction and completion of the defects and remaining works.
- When contractor considers work at PC they must notify the architect and provide shcedule of defects and incomplete work indicating each item has been resolved.
- Architect must inspect the works promptly/within time frame and issue a notice of instruction.
- The contractor must also provide the archichitect any official documents required for occupation and evidence that all commisioning tests in contract schedule have been succesful. (form 16’s form engineers and CoO from cetifier)
- Notify the owner that the project is nearing practical completion, insurances will become their responsibility, defects liability period starts and half the security is released once PC is reached
- remaining incomplete works or defects can only be of a minor nature and number
23
Q
What happens at Final Certificate?
A
- Rest of security is released
- Final defects inspection
- Make sure final claims have been paid
- Issue final certificate
24
Q
What happens if there is a disagreement between the parties to a building contract? What happens if the dispute can’t be resolved?
A
- The building contract outlines the protocol for any dispute resolution
- Parties must continue to perform their obligations under the contract
- If the dispute cannot be resolved with the parties of the contract after compulsory conference then mediation may be necessary.
- IF ABIC MW there are alternative dispute resolution paths to choose from, mediation, expert determination & arbitration
- If either party fails to comply the other may begin any legal proceedings available to it.
- furthermore it is imperative for the architect to remain impartial
- talk to your PI insurer
25
Is the client allowed to visit the site ?
* If the client wants to visit the site they need to give the contractor prior notification
26
What is the purpose of the site meeting? Typically what would be covered in an initial site meeting?
* Purpose of a site meeting is to **discuss any potential issues** from arising from the delivery of the works and in particular anything that may affect; time, cost & quality with regards to the contract
* To **advance the works by checking on and facilitating the program**
* To have the parties, including the contract administrator together to **resolve any potential issues before they arise**
* First meeting:
* Discuss the first events of claims and payments being made
* Document control
* Communication strategies/channels
* Safety on site
* Safety in design
27
How often should site meetings be held and why?
* Site meetings should be held **periodically** to ensure that issues are resolved quickly so as not to affect the program and the deliverable of the contract
* **Frequency will vary depending on stage of project** i.e. early stages when digging holes will require less on site meeting to discuss issues compared to when multiple trades are on site and more busier
28
How do you respond to a question from the contractor on site?
* It should be done in confidence **in writing from the office.**
* Questions from contractor should be formalised through an **RFI.**
29
How do you respond to a question from a sub-contractor on site?
You do not respond to any queries directly from any sub-contractor. These queries need to be delivered from the building contractor.
30
What is a bank guarantee and what is its purpose under the terms of the ABIC contract?
* Unconditional bank guarantee is an **unconditional undertaking from a bank**.
* Under ABIC contracts, there is a requirement **to provide security for the proper completion of the works**
* should be held by the owner and a copy retained by architect
* **Usually two,** each valued at half the total security (5% by default) from a financial institution approved by the client and in the form provided in Schedule
31
What is a cash retention ?
* cash retention is the fund where an **amount is retained progressively** (10%) from each payment until a nominated limit is reached. A percentage of each progress claim is directed to this fund. (5% by default)
32
When can the owner draw on the security provided by the contractor ?
* Owner must **notify the contractor & architect in writing** on the **basis** and **amount** of its **entitlement**
* The owner may draw on the security if a **certificate has been issued by the architect in favour of owner** and the contractor has not disputed the certificate.
* If security is unconditional bank guarantee the owner must give the security **provider a written demand stating the amount of its entitlement** (longer process than accessing retention – can access all of retention)
33
When if at all is security released and by which party to the ABIC contract?
* If security is cash retention
* Practical Completion has been issued by the architect (typically 50%)
* Final Certificate has been issued by the architect (the remaining 50%)
* If security is by unconditional guarantee
* owner releases one of the guarantees at PC
* owner releases any remaining security (the 2nd guarantee) at FC
34
What are the fundamental obligations of the contractor (ABIC)?
* **Begin works** **10 days** after being given **possesion of the site**
* **keep the site** and areas affected by the works **clean and tidy at all times**
* **comply with all instructions** issued by the architect (immediately comply with urgent instructions)
* obtain all **offcial documents** required under contract schedule
* comply with **relevant legislation**
* bring the works to **practical completion** in accordance with the contract
35
What is the purpose of the schedules within the ABIC contracts?
* Outlines details specific to that individual contract
* Schedules include:
* Contract information
* Special conditions
* Order of precedence
* Site information
* Form of guarantee
* Provisional sums
* Prime cost sums
* Items to be supplied by the owner
36
What is the Order of Precedence in Contract Docs generally?
* **Special conditions** shown in the schedule to the contract (including any owner occupied special conditions)
* **(Owner occupier conditions** in ABIC MW)
* **The conditions** set out in the contract/**general conditions** (generally referred to as the ‘contract’)
* **The specification** for the works – describes the standards and quality of labour and materials required to complete the works
* **The drawings** for the works – must reflect the actual scope of work as agreed between the parties at the time of the execution of the contract
* **Any other documents** in the order shown in the schedule of the contract
37
What is a dilapidation report ?
* A dilapidation report is a report based on the **current condition of a property** at a given point in time. It records any **existing damage**, and the **state of any particular aspects** of the property that are **likely to be affected by construction** **work, excavation or demolition.**
* Dilapidation reports are usually undertaken on **existing buildings on adjoining properties** or on buildings on the same property
38
What are adjustment of time costs in the contract schedule ?
* Allows for adjustment of time costs to be **agreed in advance** in order to **avoid the administrative burden and potential dispute** of the **architect's assessment** by establishing rates in advance which correspond to stages of completion
* this is to cover for the preliminaries eg site establishment, labour costs, craneage etc.
39
What happens if the cost of work associated with a provisional sum or prime cost sum exceeds the sum allowed ?
what happens if it is less than the sum allowed ?
* If the cost of work exceeds the sum **the difference + the percentage shown in the schedule** will be **added to the cost of building work.**
* the percentage added is to allow for **contractors preliminaries, overheads and profit. (default is 10%)**
* if the cost of work is less the **cost of building work is redcued by that amount.**
* UNLESS it is a prime cost sum for a **relevant authority fee** then the differencess is **just added or deducted.**
40
What information is required for seperable parts in the contract schedule ?
* **Description** of each seperable part
* Date for **practicle completion** of each seperable part
* **Defects liability period** for each part
* **Liquidated damages** rate for each part
41
If items are to be supplied by the contractor does the contractor need to ensure materials supplied are compliant ?
**yes.** Even though **owner gives warranty** that those supplied materials comply with applicable building codes and regulation the **contractor should still consider whether all materials supplied are compliant as per the contract.**
42
Does Security include GST ?
* **Yes** as the security is a **percentage of the contract price** which includes GST
* **Unless** the security type is **unconditional guarentee** AND the **onwer is registered for GST** AND **able to claim an input tax** credit. The security must be provided to the owner exclusive of GST.
43
when can the owner draw on a security for off-site plant or material ?
what percentage of the value is the security for off-site plant or material ?
* If the off-site plant or material has **suffered loss or damage preventing** it from being **incorporated** into the works OR
* A **search of the PPSR** (personal property security register) suggest that the **title is unable to pass from the contractor to the owner** OR
* A **certificate issued by the architect** in favour of the owner due to **contract being terminated** AND
* The owner has **notified the contractor and architect** of the **basis and amount**, not required if contract is terminated.
* The secuirty is to be for the **amount claimed**. Secuirty **type must be unconditional guarentee.**
44
What happens if the contractor/owner fails to take out insurance, provide a statment of all the provisions of the insurance or fails to satisfy the other party that the insurance remains in place ?
The **other party** can take out and maintain insurance , **submit a claim to the architect** who will **adjust the contract price** accordingly when issuing the next certificate.
45
What is a latent condition ?
What is a valuable item ?
and what is the procedure fo discovery of a latent condition or valuable item ?
A latent condition is a **physical condition** on, underlying or adjacent the site which a competent contractor would **not have anticipated from site information and site inspection.**
A valuable item includes minerals, money , treasure, fossils, archaeological remains, historic objects, relics.
1. Contractor is to **notify the architect** and **seek instruction** on how to proceed
2. Architect must **give contractor instruction**
3. Contractor entitled to claim **adjustment to the contract**
46
What happens if contractor discovers dangerous or contaminated material ?
1. contractor must **notify relevant authority** and the **architect**
2. Contractor must **take action in accordance** with an **official document** in relation to the dangerous or contaminated material and **copy the document to the architect**
3. This work is considered a **variation** contractor must **notify** the architect of its **intention to make a claim**
4. contractor is to **keep detail records of the costs** of carrying out the works
5. **Notify Architect** when variation is **complete and submit a claim**
Claim can only be made if circumstances giving rise to the issue **were beyond the contractors control**
47
A claim to adjust the contract must include ?
* **identification** of the **architects instruction** or **official document** in relation to dangerous or contaminated materials that caused the claim
* if neither has been issued , **details of the event and the basis for the claim**
* a **breakdown** on a **trade by trade basis** of any **costs/savings** including **preliminaries** and **overheads and profit percentage shown in schedule**
* reference to **rates** and **unit prices** in any **BoQ** if applicable
* reference to **schedule rates** if applicable
* any required **adjustment to practical completion**
* **adjustment of time costs** associated with the claim
* **detail records** kept if instruction to proceed with **variation**
48
What are some causes of delay which entitle the contractor to make a claim for adjustment of time with costs?
* **Loss or damage to the works**, materials equipent where the cause is outside of the contractors control
* The **owner failing to give possession** of the site
* **Architects instruction**
* **Relevant authorities** (or certifier) **failing to give approval** for the works
* **Dispute** with a **nearby owner**
* **Consultants** failing to provide information promptly
* A **suspension** of the work **if owner defaults and does not remedy** the default
* **Breach of contract** by the owner
* **Act of prevention** by the owner
* Act of **omission** of a **seperate contractor**
* **Delay** in relation to **dangerous or contaminated material**
* Any delay shown in the **schedule**
Contractor must take reasonable steps to **minimise the impact**
49
what are some causes fof delay that entitle the contractor to claim for adjustment of time without costs?
* **disruptive weather conditions** exceeding allowance in the **schedule**
* any **other circumstance** in the **schedule** exceeding its allowance
50
Explain the division of the wors into seprable parts before practical completion
1. Architect to **discuss with the contractor** whether works should be dvided into seperable parts and whether there are any **consequential adjustments to the contract price** and the date for **practical completion**
2. If agreement is reached architect must **notify the contractor and owner** that the works are to be divided in seperable parts
3. The **contract schedule is to be amended**
4. If security is unconditional guarentee is changed to providing **two unconditional guarentees for each seperable part**
5. Owner not to cause **interference** with the completion of other seperable parts
6. Division into seperable parts is to be treated as **urgent instruction**
7. Contractor is **entitled to claim to adjust contract** for any loss damage or expense as a result of the division
51
When can the contract be terminated ?
Owner or Contractor may terminate the contract if:
* Ther other party **defaults/does not meet a substantial obligation** and this is **not remedied** in 10 days
* If the other party becomes **insolvent**
52
How are disputes resolved in ABIC MW ?
* if dispute arises parties must **continue to perform their obligations** under the contract
* If a dispute does arise a **Compulsory Conference** between the parties must make a bona fide attempt to resolve the dispute
* If that fails an alternative dispute method must be agreed, if not either party may begin legal proceedings available to it.
* **Mediation -** someone assists with negotiations with the goal of finding agreement
* **Expert Determination -** expers acts a judge and provides a verdict, **NOT** governed by legislation (technical)
* **Arbitration** - someone acts a judge and provides a verdict, governed by legislation (complex)
* ****Parties are to **agree to the identity** of the mediator/expert/arbitraitor OR the chairperson of the **Chapter of the Resolution Institute** in the State nominates the mediator/expert/arbitraitor.
* If alternative dispute fails then eithe rparty may **beging legal proceedings available to it.**
53
What is the purpose of defects liabilty period ?
* A defects liability period gives certainty as to the process that will be followed for **making good any defects which may not be apparent** at the date of practical completion.
* useful in providing a means of **making good any defects that are apparent at the time of practical completion** but which either do not need to be rectified prior to practical completion or perhaps cannot be easily rectified
* It also makes practical sense to have a **contractor who carried out the original work return** to fix any defect as this contractor will be familiar with the site and the work in question.
54
What is a latent defect ?
* A latent defect in building work is usually classified as such because **it does not become obvious**, or the effects of the defect do not become obvious, **until after the end of the defects liability period.**
* **Faulty construction** - when **work is not built in accordance** with **the contract documents**, **contractor's fault** however, **architecht** me be at **fault** for **failing to identify faults.**
* **Misuse by Client** - owners fault, architect may charge fee to help rectify if required
* **Design Defects** - architects responsibility, notify PII, do not admit fault. No fee for rectification
