LABOUR AND MATERIAL SHORTAGES MAY IMPACT YOUR BUILD IN 2023

The last few years of lockdowns and COVID-19 restrictions has created a ripple effect down the supply chain. From a shortage of workers to rising material costs and delays on imported materials, the pandemic is still having a substantial impact on residential construction. Pressures may start to ease once supply levels return back to a normal level but it’s important to expect that delays and shortages, and even price increases, will likely continue for the foreseeable future. It’s essential that you factor in delays and rising materials costs into your budget and building timeline

• Material shortages due to the impacts of COVID-19 will continue to occur and as a result, delays from a backlog of orders will be noticed. This could mean delays in your build timeline.

• Unfortunately for some products, price increases will continue in 2023. This could have an impact on the cost of your build.

• The building and construction industry continues to face skilled labour shortages, an issue that Master Builders Associations across the country continue to advocate for. This could also result in delays in your build timeline.

• Most residential building contracts will include terms that allow for extensions of time if there are unavoidable delays. They may also include terms that allow for the value of the contract to be increased if the prices of materials rise.

• Make your material selections early and try to limit any variations to your plans.

• Continue to have open and honest lines of communication with your builder about any concerns you may have.

• Understand that in most instances, your builder has no control over material delays or price increases.

• Read your contract and be sure to seek legal advice before signing any contracts.

• Factor in some price increases to your budget.

• Be flexible about your chosen fixtures and fittings as this may assist in shortening project delays.

Definitely not! While some trades and materials continue to be impacted, be rest assured that your dream build can still become a reality. By working closely and flexibly with your builder, you have the tools and means to create the dream home you’ve always wanted.

The word asbestos rings alarm bells with many people, especially those of us in the ACT. Asbestos is a group of naturally occurring minerals, exposure to which can cause life-threatening illnesses.

Asbestos is present in nearly every home that was built before 1985 and is usually located in the eaves or in wet areas like bathrooms and laundries. The experts tell us that when materials that contain asbestos are in good condition and are left undisturbed, they do not pose a risk to your health.

It is the word ‘undisturbed’ that makes all the difference. If you are doing home repairs or renovations yourself, then you need to be aware that this might disturb asbestos fibres. If your home was built prior to 1985, Master Builders ACT recommends that you engage a qualified tradesperson to conduct any repairs or renovations as they ought to be familiar with both safety and compliance obligations in respect of asbestos. You can read more about asbestos here: http://www.asbestostaskforce.act.gov.au/

Silica is also a naturally occurring mineral that is found in many rocks and soils. When silica takes the form of ‘crystalline silica’ it can become a health hazard. Material containing silica is hazardous when blasted, crushed, cut or drilled by machinery.

Silica is commonly found in many ordinary items used in the construction of a home, such as engineered stone benchtops, asphalt, bricks, cement, tiles and pavers. Similar to asbestos, the danger of silica to you and your family is limited when it is left undisturbed. However, if you decide to carry out modifications or renovations to your home (such as modifying the kitchen benches), Master Builders ACT strongly recommends you engage a qualified tradesperson who has completed the 10830NAT – Course in Crystalline Silica Exposure Prevention course (mandatory in the ACT from 1 July 2023). This will ensure that any work is carried out safely, with the appropriate equipment and in the appropriate manner.

Entering a building contract is often one of the most high-cost transactions you will have, so it is important that you obtain independent advice before you sign –just like you would see a solicitor or conveyancer when purchasing your land. Many builders use a standard form contract, such as the template provided by Master Builders ACT, however, there can often be amendments or special conditions included in these contracts, as well as crucial timeframes and important terms such as ‘prime cost’ and ‘provisional sum’, that it is worthwhile having explained to you by a professional.

Your building contract will have specific timeframes that you should take note of. This includes when a builder is required to commence work, the amount of time that you have to respond to notices, the period of time you must notify the builder about any defects, and how long they have to respond and undertake rectification work. Your contract will also set out the timeframes for when you are required to make payment to your builder, which are usually called Progress Payments.

Most building contracts will require all variations to be in writing. It is important that if you require something in your contract to be varied, that you let your builder know as soon as possible – this could range from a change in your selections, through to amendments to the floor plan and design. Even if you have a conversation with your builder, it is recommended you confirm your requests in writing, and they should respond accordingly. Putting important changes in writing will provide clarity for both you and your builder and ensure that nothing is missed.

Building contracts include items that have a price listed as a “provisional sum”. A provisional sum is most commonly used in circumstances where an owner has not yet made a selection (for example, kitchen joinery), or when a builder is unable to determine an accurate price of the supply and fixing of the materials. With a global shortage of building products and labour, provisional sums are currently being used for items with material and/or labour components likely to experience price fluctuations. Some examples include timber, and steel frames and windows. A provisional sum means that the builder has provided an estimate only, and you will be charged (by way of a variation) the actual cost, plus builder’s margin. For example, if a contract has a provisional sum listed as $10,000, and the item(s) total cost is $15,000, this is the amount you will be required to pay. You should speak with your builder about the provisional sums in your contract before signing.

A prime cost item in a contract is an amount allocated for the supply of necessary items that have not been selected by you. For example, a builder may include tiles as a prime cost item, at a price of $40 per square metre. This means that if you select tiles that are $100 per square metre, there will be an additional cost to you. If you have already made selections or are fairly confident in your choices for items included as ‘prime cost’ items, you should let your builder know at the quoting / contract stage so they can ensure that the allowances are reasonable for your selections.

Disclaimer: The above information is general information only and should not be taken as legal advice. Master Builders ACT recommends that any person considering signing a building contract should obtain independent advice before doing so.