Making payments outside of building contract terms

The Queensland Building and Construction Commission (QBCC) has issued a warning to home owners urging them to seek legal advice before making payments that fall outside the terms of a fixed price building contract under the guise of ‘contract variations’, to protect themselves from unwarranted payments. Additional funds could be demanded from property owners to cover an increase in the costs of materials and labour.


The QBCC warning states that there may not be any contractual basis for contractors to demand payment for increased labour and material costs as ‘contract variations’ under a fixed price contract. A QBCC spokesperson said the QBCC urges home and property owners to seek their own legal advice before agreeing to or paying an increase in the contract price for a fixed price contract.


As this is a contractual issue, this matter would be considered a civil matter and the QBCC would not be able to become involved. However as it is a breach of a contract, which could potentially allow the contract to be terminated, a claim could be lodged by the home owner through the Queensland Home Warranty Scheme.


Parties trying to resolve contractual issues over material or labour shortages should consider mediation with the Accelerated Builder/Consumer Dispute (ABCD) Framework. You can read more on the Framework here - https://www.jensenlawyers.com.au/post/accelerated-builder---consumer-dispute-mediation-service


The full Accelerated Builder / Consumer Dispute Framework Policy can be found here.


Prior to engaging in this process, it is recommended that you obtain legal advice to possible outcomes and your position under the contract.


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