Entering into a building contract can be an exciting and significant investment for consumers, whether it be for a new home or a renovation project.
However, sometimes unforeseen circumstances arise, and a consumer may need to terminate the contract. It is essential to understand the circumstances under which a consumer may lawfully terminate a building contract and the steps involved in doing so.
Legal Basis for Terminating a Building Contract
In Queensland, consumers have the right to terminate a building contract under certain circumstances, including:
Contract Clause - If the building contract contains a clause that gives the consumer the right to terminate under specific circumstances, such as a failure to complete the work within a specified timeframe, the consumer may terminate the contract.
Common Law or Legislation - If the building contract does not contain a termination clause, consumers may still have the right to terminate under the common law or legislation. For example, a consumer may terminate a building contract if the builder has breached a fundamental term of the contract, such as failing to use appropriate materials or not completing the work to a satisfactory standard.
Steps for Terminating a Building Contract
If a consumer wishes to terminate a building contract, they must take the following steps:
Review the Contract - The consumer should review the building contract to determine whether there is a clause that allows for termination under the specific circumstances.
Seek Legal Advice - If there is no termination clause in the contract, the consumer should seek legal advice to determine whether they have the right to terminate under the common law or legislation.
Provide Written Notice - The consumer must provide written notice of termination to the builder, specifying the reasons for termination and the effective date of termination. The notice should be sent via registered mail to ensure it is received.
Seek a Refund - If the consumer has made any payments to the builder, they should request a refund of any amounts paid. If the builder refuses to refund the amount, the consumer may need to seek legal assistance to recover the funds.
It is important to note that terminating a building contract may have legal implications, such as a requirement to return any goods or property exchanged under the contract, or the possibility of being held liable for damages. Therefore, it is crucial to seek legal advice before taking any action.
Terminating a building contract is not a decision to be taken lightly, and it is important to understand the legal implications and steps involved in doing so.
If you are considering terminating a building contract, we urge you to reach out to us for an obligation-free chat.